India, UK Sign Historic Free Trade Agreement to Boost ₹3 Lakh Crore in Annual Trade

India and the United Kingdom on Thursday signed a landmark Free Trade Agreement (FTA) aimed at significantly boosting bilateral trade by nearly ₹3 lakh crore annually. The deal, hailed as a major economic milestone, was formalised in the presence of Prime Minister Narendra Modi and UK Prime Minister Keir Starmer.

The agreement was officially signed by India’s Commerce Minister Piyush Goyal and UK Trade Secretary Jonathan Reynolds, following months of negotiations between the two nations.

99% of Indian Exports to UK to See Zero Tariffs

Indian exporters are set to gain big under the new agreement, which will eliminate tariffs on 99% of Indian goods entering the UK. The move is expected to make Indian textiles, pharmaceuticals, engineering goods, and agricultural products cheaper and more competitive in the British market.

Officials noted that nearly 100% of India’s export value to the UK is covered under zero-duty access, offering a massive boost to sectors reliant on global demand.

Tariff Cuts on UK Exports to India

For the UK, the FTA provides key access to the Indian market. British exporters of whisky, automobiles, and high-end machinery will see import duties slashed from 15% to just 3%, significantly reducing prices for Indian consumers and easing business costs for British firms.

UK Prime Minister Keir Starmer described the FTA as a “historic win” for Britain, noting that the UK currently imports goods worth £11 billion from India annually. The deal is expected to widen this figure substantially by opening new avenues for trade and investment.

A Boost for Indian Industry and Strategic Ties

Indian officials stressed that the FTA will unlock significant growth opportunities for Indian businesses, especially small and medium-sized enterprises. By opening up the UK market further, the agreement enhances India’s global trade footprint and strengthens its manufacturing and export-led sectors.

Commerce Minister Piyush Goyal called the deal a “win-win for both economies,” noting its long-term benefits for jobs, technology collaboration, and market expansion.

Strategic Economic Cooperation Strengthened

As the FTA comes into force, both nations are preparing for deeper cooperation in manufacturing, services, innovation, and emerging technology. The deal is also seen as a key element in expanding the India–UK strategic partnership, with broader implications for Indo-Pacific economic stability.

The agreement marks one of the most comprehensive bilateral trade pacts signed by India in recent years and sets a new benchmark in international trade diplomacy.

Further implementation steps and sector-specific guidelines are expected in the coming weeks as both nations move toward full operationalisation of the agreement.