India and UK Seal Historic Free Trade Agreement to Boost Bilateral Trade

In a landmark move, India and the United Kingdom signed a free trade agreement on Thursday during Indian Prime Minister Narendra Modi’s visit to Britain. The deal, finalized after three years of negotiations, aims to significantly boost bilateral trade by £25.5 billion ($34 billion) by 2040. The agreement, which is the UK’s most substantial since Brexit, will reduce tariffs on key goods like textiles, whisky, and automobiles, while also improving market access for businesses in both nations.

Under the new pact, tariffs on Scotch whisky will immediately drop from 150% to 75%, and reduce further to 40% over the next decade. Car import duties into India, currently as high as 110%, will be lowered to 10% within five years. In return, Indian exporters will benefit from zero duties on 99% of their goods entering the UK. While the economic output boost for Britain is modest, at £4.8 billion a year by 2040, the deal symbolizes a major step in post-Brexit global trade engagement.

The agreement also includes cooperation on defence, climate change, crime, and services like insurance. Although visas are not covered, the deal facilitates easier access for temporary business visitors and eliminates double social security contributions for workers posted between the two countries. British Prime Minister Keir Starmer called the deal a sign of “a new global era,” while PM Modi described it as “a blueprint for our shared prosperity.”

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