New Delhi [India]: In a historic move poised to reshape bilateral trade, India and the United Kingdom have successfully concluded a Free Trade Agreement (FTA) along with a Double Contribution Convention, opening vast opportunities for labour-intensive sectors and significantly enhancing trade in services.
Announced jointly by Prime Minister Narendra Modi and UK Prime Minister Sir Keir Starmer, the FTA is being hailed as one of the most comprehensive trade deals ever signed by India. It is expected to boost exports, create jobs, and deepen the India-UK Comprehensive Strategic Partnership.
“This landmark agreement will catalyse trade, investment, growth, job creation, and innovation in both our economies,” PM Modi said in a post on X.
Key Highlights of the India-UK FTA:
- Zero Duty on 99% of Indian Exports: Huge benefit for sectors like textiles, marine products, leather, footwear, engineering goods, toys, and gems & jewellery, making them more competitive in the UK market.
- Massive Gains in Services Sector: Enhanced market access in IT/ITeS, financial services, professional services, business and educational services.
- Labour and Tech Sector Boost: Agreement expected to positively impact employment and manufacturing in both labour- and technology-intensive sectors.
- Exemption from UK Social Security: Under the Double Contribution Convention, Indian workers and employers are exempted from UK social security payments for three years, providing significant savings and improved competitiveness.
- Mobility of Skilled Professionals: Eased entry for business visitors, investors, engineers, chefs, yoga instructors, musicians, and intra-corporate transferees—including dependents with the right to work.
- Support for MSMEs & Startups: Agreement provides enhanced access and protection for Indian startups, farmers, and MSMEs, supporting India’s economic transformation.
- Trade Volume to Double: Current bilateral trade at $60 billion, expected to double by 2030.
Strategic and Economic Impact:
Commerce and Industry Minister Piyush Goyal praised PM Modi’s leadership, calling India a “Vishwa Mitra – Trusted Partner” of the world. He described the agreement as a “new benchmark for equitable and ambitious trade” that aligns with India’s vision of Viksit Bharat 2047.
“This FTA is not only about goods and services, but also about people, possibilities, and prosperity,” Goyal said.
Commerce Secretary Sunil Barthwal called the FTA a “game-changer,” noting that it is India’s most comprehensive trade pact to date and a gold standard for future negotiations.
Regulatory Reforms and Trade Facilitation:
The agreement also addresses non-tariff barriers and promotes good regulatory practices, aligning with India’s push for ease of doing business and transparency. It includes modern digital trade provisions, enhances supply chain resilience, and fosters sustainable, inclusive economic growth.
Both nations reaffirmed their commitment to using this agreement to co-develop products and services for global markets and to strengthen their position as global innovation hubs.
“This FTA marks a new era of trust, collaboration, and shared prosperity between two leading democracies,” the Commerce Ministry said.