£34 Billion Boost: India-UK FTA Redefines Economic Ties

India and the United Kingdom on May 6, 2025, signed a landmark Free Trade Agreement (FTA) with the vision of hugely augmenting economic cooperation, trade, and jobs. The agreement incorporates substantial tariff reductions, whereby India reduced tariffs on 90% of UK imports (85% completely tariff-free within ten years) and the UK removed tariffs from 99% of Indian exports, such as apparel, seafood products, leather, gems, and automotive parts. These reductions are considerably greater for whisky and gin (from 150% to 75% ad valorem, then to 40% over 10 years), and motor car levies (from over 100% to 10% under quotas). FTA also provides UK businesses greater access to the Indian government procurement market for services such as transport, health, and power and freer and employment in the UK for Indian professionals. A Double Contribution Convention also excludes UK workers in India (and vice versa) from three years of social security contributions, which is cheaper for both sides of employees and employers.

It covers goods, services, and e-commerce, and addresses non-tariff barriers without opening sensitive products such as sugar, milled rice, pork, chicken, and eggs. Expected to increase the trade of the two nations among themselves by £25.5 billion ($34 billion) every year in the long run, the FTA will increase the GDP of the UK by £4.8 billion ($6.4 billion) every year and the wages by £2.2 billion. The FTA, India's biggest trade deal to date and the UK's biggest post-Brexit agreement, will increase India-UK trade to $120 billion by 2030 and also create new employment opportunities in the two nations.