In a major step forward, the United Kingdom and India have signed a Free Trade Agreement (FTA) aimed at boosting trade, reducing tariffs, and supporting economic growth in both countries.
Key Highlights of the UK-India Trade Deal
1. India to Cut Tariffs on UK Imports
India will cut tariffs on 90% of goods imported from the UK.
Out of these, 85% of the goods will become tariff-free within 10 years.
2. Lower Taxes on Whisky, Gin, and Cars
India will reduce import taxes on UK whisky and gin from 150% to 75%.
Import duties on UK-made cars will drop to 10% under a special import limit (quota).
3. Economic Benefits for the UK
The UK Government expects the deal to increase the UK’s GDP by £4.8 billion per year by 2040.
It is also expected to boost total trade between India and the UK by £25.5 billion per year by 2040.
What Will India Gain?
India stands to benefit significantly across various sectors due to strategic developments and international partnerships. In the textile and clothing sector, the country is expected to receive large orders along with the advantage of duty-free exports, enhancing its competitiveness globally. The gems and jewellery industry will gain from more competitive pricing in the European market, potentially increasing exports and market share.
In the IT and IT-enabled services (IT-ITeS) sector, India is likely to witness growth in digital service exports, driven by improved access and demand from global clients. The education sector will benefit through greater opportunities for Indian students, including easier access to student visas and broader academic collaboration. Lastly, the startup and investment ecosystem in India is set to receive a boost, with increased encouragement for investment and the formation of new international partnerships, further strengthening India’s innovation landscape.
What This Means for Both Countries
This trade agreement is expected to:
Make British products cheaper for Indian buyers.
Open up the Indian market for UK businesses.
Create new opportunities in sectors like alcohol, automobiles, and services.
Strengthen the economic relationship between India and the UK.
India-UK Agreement: 3-Year Relief from Social Security Payments for Indian Workers in the UK
India’s Trade Ministry has announced that under the new India-UK agreement, Indian employees working in the United Kingdom will not have to pay social security contributions for the first three years.
PM Modi and UK PM Starmer Hail Historic India-UK Free Trade Agreement
Indian Prime Minister Narendra Modi announced on Tuesday that India and the United Kingdom have successfully finalized a free trade agreement. This is a major deal between the world’s fifth and sixth largest economies.
He also said that both countries have agreed on a social security pact. These agreements will strengthen their partnership, increase investments, and help create more jobs.
UK Prime Minister Keir Starmer said that reducing trade barriers with countries like India will help build a stronger and safer UK economy.
He added, “This is the biggest trade deal the UK has signed since leaving the EU, and it’s the most ambitious one India has ever done. It will bring billions of pounds to our economy and create jobs across the UK.”
Starmer also said, “This deal was promised many times over the past eight years. Prime Minister Modi and I agreed in Brazil last year to speed up the negotiations.”
Conclusion
The UK-India Free Trade Agreement is a major economic move that is set to benefit both nations. It lowers trade barriers, supports jobs, and opens doors for future cooperation.
Stay tuned for more updates on how this deal will impact businesses and consumers in both countries.

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