India, UK successfully conclude Free Trade Agreement, PM Modi says ‘historic milestone’

Prime Minister Narendra Modi on Tuesday announced that India and UK have successfully concluded their Free Trade Agreement in a historic milestone.

PM Modi, who spoke with UK Primer Minister Keir Starmer, said that the mutually beneficial FTA comes with a double contribution convention, which is a social security pact between the two countries.

“Delighted to speak with my friend PM @Keir_Starmer. In a historic milestone, India and the UK have successfully concluded an ambitious and mutually beneficial Free Trade Agreement, along with a Double Contribution Convention,” Modi said in a post on X.

Modi said that the agreements will deepen partnership and investments, while boosting job creation. He also looked forward to welcoming Starmer to India soon.

“These landmark agreements will further deepen our Comprehensive Strategic Partnership, and catalyse trade, investment, growth, job creation, and innovation in both our economies. I look forward to welcoming PM Starmer to India soon,” he added.

Starmer said that strengthening alliances and reducing trade barriers with economies around the world is part of their Plan for Change to deliver a stronger and more secure economy, as per a press release by the Prime Minister's Office.

Major deal for both countries

Both the prime ministers agreed that the deal was indeed a major one in India and UK's history, a press release from the UK government stated.

“Through pragmatism and purpose, the leaders noted that this historic deal is the biggest the UK has done since leaving the EU, and the most ambitious India has ever done,” it said.

In a statement on X, the UK Prime Minister's office said that the deal will benefit both the countries.

“The UK and India have agreed a landmark free trade deal to make working people and businesses better off in both our countries,” the PM's official handle said.

India-UK Free Trade Agreement

The India-UK FTA comes on the back of US President Donald Trump's sweeping new tariffs, and marks one of India's largest deals with a major country.

The conclusion of the ambitious FTA is expected to significantly enhance bilateral trade, generate new avenues for employment, raise living standards, and improve the overall well-being of citizens in India and UK.

Talks over a free trade deal between India and Britain were initially launched in January 2022. However, negotiations were irregular given that Britain had four prime ministers in the last three years.

“It will also unlock new potential for the two nations to jointly develop products and services for global markets. This agreement cements the strong foundations of the India-UK Comprehensive Strategic Partnership, and paves the way for a new era of collaboration and prosperity,” the PMO press release said.

The deal aims to increase bilateral trade by a further $40 billion by 2040.

India UK FTA: What gets cheaper?

According to a report by Reuters, the deal lowers tariffs on goods such as whiskey, advanced manufacturing parts and food products such as lamb, salmon, chocolates and biscuits.

The India-UK FTA also agrees to quotas on both sides for autos imports.

There are 26 chapters in the agreement, which includes goods, services, investments and intellectual property rights, as per a PTI report.