Prime Minister Narendra Modi greets as he embarks on a visit to the United Kingdom and the Maldives, in New Delhi on July 23, 2025.
| Photo Credit: DPR PMO/ANI Photo
India and the U.K. will sign a free trade agreement on Thursday (July 24, 2025) in London that will allow export of labour-intensive products such as leather, footwear and clothing at concessional rates, while making imports of whisky and cars from Britain cheaper.
The pact also helps double trade between the two economies to $120 billion by 2030.
Also Read: Caution and optimism: On India’s FTA with the United Kingdom
The pact, officially called a comprehensive economic and trade agreement, will be signed in the presence of Prime Minister Narendra Modi and British Prime Minister Keir Starmer.
Commerce and Industry Minister Piyush Goyal and his British counterpart Jonathan Reynolds would sign the agreement. Once the pact is signed, it will require approval from the British Parliament before it can take effect. The process may take about a year.
PM Modi on Wednesday (July 23, 2025) left on a four-day visit to the U.K. and the Maldives.
The two countries announced the conclusion of the negotiations for the trade agreement on May 6.
The pact has chapters on issues including goods, services, innovation, government procurement, and intellectual property rights.
The two countries have also concluded the negotiations for the Double Contribution Convention Agreement, or social security pact. It would help avoid double contribution to social security funds by Indian professionals working for a limited period in Britain.
In such trade agreements, two countries either eliminate or significantly reduce customs duties on maximum goods traded between them. They also ease norms for promoting trade in services and bilateral investments.
Under the pact, 99% of Indian exports would benefit from zero duty in the U.K. market.
The main proposals of the agreement include slashing of import duty on British Whisky and gin from 150% to 75% before reducing to 40% by ten years of the deal; automotive tariffs will be reduced from over 100% to 10% under a quota.
Other goods with reduced import duties, which can open markets and make trade cheaper for businesses and Indian consumers, include cosmetics, aerospace, lamb, medical devices, salmon, electrical machinery, soft drinks, chocolate and biscuits.
It will open export opportunities for domestic labour-intensive sectors such as textiles, marine products, leather, footwear, sports goods and toys, gems and jewellery, engineering goods, auto parts and engines, and organic chemicals.
On the services front, the agreement eases mobility for professionals including Contractual Service Suppliers; Business Visitors; Investors; Intra-Corporate Transferees; partners and dependent children of Intra-Corporate Transferees with right to work; and Independent Professionals like yoga instructors, musicians and chefs.
India’s exports to the U.K. rose by 12.6% to $14.5 billion, while imports grew by 2.3% to $8.6 billion in 2024-25.
The bilateral trade between India and the U.K. increased to $21.34 billion in 2023-24 from $20.36 billion in 2022-23.
Published – July 23, 2025 07:55 pm IST
