A Free Trade Agreement finalised between India and the United Kingdom eliminated border tariffs on 90% of their trade goods. The agreement supports bilateral benefits by removing import duties for 90% of trade goods across various market segments. Officials predict the Free Trade Agreement will drive UK-India bilateral trade to reach £25.5 billion while generating £4.8 billion in annual economic benefits by 2040.
The agreement implements necessary cuts to UK import tariffs. Under this agreement, Scotch whisky tariffs will decrease to 75 percent and British car import restrictions to 10 percent through restricted quotas. In addition to reducing medical device tariffs, India has lowered duties on specialty gin and lamb and advanced machinery and healthcare equipment. New 2022 trade statistics show India plans to decrease its first-phase tariffs by £400 million, which will expand to £900 million over the next ten years.
During their phone conversation, Narendra Modi and Keir Starmer confirmed the trade deal while officials reported a friendly tone between the leaders. The trade agreement was finalised when India's Commerce Minister Piyush Goyal teamed up with UK Trade Secretary Jonathan Reynolds at their discussions in London.
The trade agreement must undergo legal finalisation procedures before the British Parliament performs its assessment. According to Reynolds, the trade deal would expand economic prosperity throughout the UK across all regions, including manufacturing bases in the North-East and whisky districts in Scotland.
The Free Trade Agreement contains provisions that support India's requirement to establish a Double Contributions Convention. This provision stops working professionals from making social security and national insurance payments in either nation. The agreement creates new professional worker classifications allowing chefs, musicians and yogis to enter the UK through their professional visa programs. UK immigration rules stay the same, but the system now offers additional business-linked ease of movement.
Both countries have moved forward with Free Trade Agreement negotiations, but must finalise the accompanying Bilateral Investment Treaty (BIT). The continuous parallel talks give government officials confidence that a BIT conclusion is approaching.
After a three-year pause due to previous electoral activities, the negotiations resumed in February 2025 to produce this trade agreement. Validated by both governments, the deal provides a platform that enhances economic connections and reshapes future market accessibility opportunities. The agreement is a formal mechanism to strengthen their strategic alliance by building trade volumes through improved cross-border collaboration, generating innovation and employment growth, and attracting investment capital.