VOIWORLD
India and the UK signed a landmark Free Trade Agreement (FTA) on May 6, 2025, after nearly three years of negotiations. The pact aims to deepen economic ties between the world’s 5th and 6th largest economies, at a time when global trade faces mounting protectionism and geopolitical realignments.
“This historical deal signed by Indian Prime Minister Narendra Modi and UK PM Keira Starmer, is set to double our bilateral trade to $120 billion by 2030. For the UK, it means an annual boost of nearly $5 billion to our economy and $2.2 billion in wages. For India, it promises significant job creation and enhanced market access for its goods. Textile, engineering goods, IT services, green technology and higher education, all will gain market access. Temporary Indian professional working in the UK will now be exempted from national insurance tax. This means more saving and fairness for our skilled Indian workers abroad. Scottish Salmon and Scottish Liquor Scotch will see tariff reduced immediately, opening a huge market and creating 1,200 UK jobs, many here and thousands and lakhs in India. Scottish Salmon will now enter India duty-free, unlocking millions in new exports. This agreement strengthens our living bridge of the people and culture. It is a partnership built on mutual respect, promoting fair competition, protecting innovation and committing us to shared environmental goals. The UK-India Free Trade Agreement is a win-win for both countries and we are proud to lead the way in an exciting new era of global collaboration”, according to Glasgow-based Dhruva Kumar, Head-Alba Friends of India who has been tracking the deal very closely. Dhruva has also been Alba MP Candidate-Glasgow South
WATCH DHRUVA KUMAR’S VIDEO MESSAGE
INDIA UK FTA IN DETAIL
Trade value in 2024: £42.6 billion
Projected annual trade boost by 2040: £25.5 billion
Key Goods and Tariff Reductions
For the UK (Exports to India):
Whisky & Gin: Tariffs cut from 150% → 75% immediately → 40% by year 10
Automobiles: Tariffs cut from 100%+ to 10% under a quota
Other products with reduced tariffs:
Cosmetics & Soft drinks
Medical devices
Lamb, salmon, chocolate, biscuits
Electrical & aerospace equipment
For India (Exports to the UK):
Gains mainly in textiles, leather, gems & jewelry, engineering goods
Services sector access expanded, though only around 100 new visas/year under agreed quotas
Labour & Investment Provisions
UK will grant limited work permits for Indian professionals in IT, healthcare, and finance
Nearly £6 billion in new UK investments and export deals, including:
Airbus and Rolls-Royce expansions in India
Broader aerospace collaboration
Why This Deal Matters
For the UK:
A major post-Brexit win, compensating for lost EU market access
Access to one of the fastest-growing large economies
Helps offset global supply chain disruptions and reduce China dependency
For India:
First major FTA with a Western economy after pulling out of RCEP in 2019
Expands market access and aligns with “China-plus-one” strategy
Boosts Make-in-India and global competitiveness
Challenges & Negotiation Sticking Points
Immigration & Visas: UK was cautious due to domestic political sensitivities post-Brexit
Carbon Border Tax: UK’s proposed levy on carbon-intensive imports raised concerns for Indian metal exporters
Services Trade: Despite the agreement, India’s gains in services remain modest
GTRI Report: Warned that India may get limited additional benefits, as many of its exports to the UK already face low tariffs
What Is a Free Trade Agreement (FTA)?
An FTA is a pact between countries to:
Reduce or eliminate tariffs and non-tariff barriers
Facilitate smoother trade in goods and services
Promote investment, innovation, and economic cooperation
According to India’s Commerce Ministry:
“FTAs reduce costs and increase the predictability of doing business across borders.”
