Daijiworld Media Network - New Delhi
New Delhi, May 6: Prime Minister Narendra Modi and UK Prime Minister Keir Starmer officially sealed a historic Free Trade Agreement (FTA) on Tuesday, marking a major milestone in the evolving India-UK Comprehensive Strategic Partnership.
The pact, finalised during a phone conversation between the two leaders, aims to boost bilateral trade, investment, and innovation. It also includes the Double Contribution Convention, further cementing economic ties between the two nations.
Speaking at the India @2047 event, PM Modi announced, “This is a historic day for India. The India-UK pre-trade agreement has now been finalised. It will unlock new growth avenues, especially for our MSME sector.”
After three years of intense negotiations, the agreement is expected to boost bilateral trade by £25.5 billion (approximately $34 billion), with India committing to reduce tariffs on 90% of British goods — including steep cuts on items like cars, alcohol, footwear, and apparel. Most of these products are expected to become tariff-free within a decade.
PM Starmer said in an official statement that this agreement aligns with the UK’s broader economic recovery vision under its ‘Plan for Change’ and will help build a more resilient global trade framework.
Both leaders emphasised the agreement’s potential to create jobs, raise living standards, and foster innovation. They highlighted how the deal reflects a bold and forward-looking approach to diplomacy and trade, reinforcing the long-term vision for prosperity in both countries.
The trade pact also comes amid broader global uncertainty, following former U.S. President Donald Trump's tariff-driven trade disruptions. Analysts believe such targeted deals between rising economies like India and established markets like the UK signal a growing shift in the global economic landscape.
India’s Commerce Minister Piyush Goyal and UK Business Secretary Jonathan Reynolds concluded the final rounds of negotiations last week.
With $57 billion in goods and services exchanged last year, the India-UK trade relationship is already strong — and now poised for significant expansion.
This landmark deal sets the stage for deeper collaboration in sectors like technology, defence, education, and green energy, and signals India's growing prominence as a global trade powerhouse.