India and the United Kingdom have formally concluded a landmark Free Trade Agreement (FTA) and a “double contribution convention,” marking the end of three years of intensive negotiations, both governments announced on Wednesday, May 7.
British Prime Minister Keir Starmer hailed the deal as a major economic win, stating: “Today we have agreed a landmark deal with India — one of the fastest-growing economies in the world — which will grow the economy and deliver for British people and business.”
Indian Prime Minister Narendra Modi described the agreement as an “ambitious and mutually beneficial” milestone, adding that it would lay the foundation for stronger economic and strategic ties between the two nations.
According to the UK government, the FTA is expected to boost bilateral trade by £25.5 billion ($34 billion). In 2024, trade between the two countries reached £42.6 billion, an 8.3% increase from the previous year. However, the UK still ran an £8.4 billion trade deficit with India, which ranked as its 11th-largest trading partner.
Key provisions of the agreement include:
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The UK will eliminate tariffs on 99.1% of Indian imports immediately upon implementation.
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India will reduce tariffs on 90% of UK tariff lines, with 85% of them becoming zero-tariff within 10 years.
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Under the “double contribution convention,” Indian workers temporarily employed in the UK will be exempt from paying national insurance contributions for up to three years, along with their employers.
The Indian government anticipates that the agreement will double current bilateral trade — estimated at around $60 billion — by 2030.
This FTA is seen as a strategic and economic milestone, further strengthening ties between the two Commonwealth nations as they navigate an increasingly competitive global trade environment.
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