London, July 24: India and the United Kingdom on Thursday signed a historic Free Trade Agreement (FTA), aimed at boosting bilateral trade and investment between the two nations. The deal was formalized in the presence of Prime Ministers Narendra Modi and Keir Starmer during PM Modi’s two-day visit to the UK.

UK Prime Minister Keir Starmer described the agreement as a major milestone, saying, “A landmark deal with India means jobs, investment and growth here in the UK. It creates thousands of British jobs, unlocks new opportunities for businesses, and puts money in the pockets of working people. That’s our Plan for Change in action,” he wrote on X ahead of the ceremony.

The agreement, first announced as concluded on May 6, aims to reduce or eliminate tariffs on a wide range of goods and services, with a target of increasing bilateral trade to USD 120 billion by 2030. It aligns with India’s Viksit Bharat 2047 vision and is seen as a significant step toward strengthening economic ties between the two countries.

According to India’s Ministry of Commerce and Industry, the FTA provides extensive market access, with tariff elimination on approximately 99% of tariff lines, covering nearly 100% of the trade value. The agreement is expected to significantly benefit Indian exports in key sectors including textiles, leather, footwear, sports goods, marine products, gems and jewellery, engineering goods, auto parts, and organic chemicals.

The UK government also confirmed that India’s average tariff on British goods will fall from 15% to 3% under the new FTA. British businesses in sectors such as cosmetics, soft drinks, cars, and medical devices will find it easier to access the Indian market.

A major highlight is the reduction in tariffs on British whisky — currently taxed at 150% — which will be slashed to 75% immediately and further reduced to 40% over the next ten years. This gives the UK a competitive edge in India's growing market for premium spirits.

(With agency inputs)

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