After three years and 14 rounds of negotiations (with pauses for elections in 2024), Prime Ministers Narendra Modi and Keir Starmer announced on May 6, 2025 the successful conclusion of the FTA and a related Double Contribution Convention (social security pact). For decades, India’s trade with the UK was negotiated as part of wider EU–India talks (which stalled around 2013). After the UK left the EU in 2020, a separate UK–India agenda emerged. In 2021, both countries declared an Enhanced Trade Partnership, setting out ambitious plans to negotiate a full FTA. This landmark deal is designed to be “ambitious and mutually beneficial”, cutting tariffs on nearly all traded goods and opening services markets. It covers goods, services, investment and digital trade, and aims to double bilateral trade by 2030 (targeting roughly $100–120 billion). In formal terms, the FTA is not yet legally signed or ratified, but the text has been agreed and awaits final legal verification and parliamentary approval. The UK and India will also negotiate a Bilateral Investment Treaty (BIT) in parallel, while the Double Contribution Convention will exempt Indian and UK workers posted in the other country from dual social-security contributions for up to three years.

The UK and India share a “strong cultural linkage” and common values as two large democracies, and an FTA is seen as a win-win to deepen that partnership India’s economy is surging – projected to be the world’s 3rd-largest by 2050 – with its middle class set to double by 2030. An ambitious UK–India deal aligns with the UK’s “tilt to Indo-Pacific,” diversifying markets and supply chains. Trade between the two stood at £23.3 bn in 2019 (UK’s 15th-largest partner). Modelling suggests an FTA could boost UK exports by up to £16.7 bn by 2035, and grow UK GDP by roughly £3.3–6.2 bn (≈0.12–0.22%) over the long run. In short, this deal is designed to drive jobs and growth across Britain, supporting the government’s “levelling up” agenda in all regions. Importantly, the Strategic Case stresses that the FTA must work for the whole UK and uphold UK standards – it will not weaken environmental, animal welfare or labour protections, nor affect the NHS or medicine costs.

Agreement: Goods and Services

The tariff concessions are steep: India agreed to cut tariffs on about 99% of its tariff lines (covering nearly 100% of trade value). The UK will eliminate tariffs on roughly 90% of its lines, with 85% reaching zero within ten years. In practice, this means most exports on both sides will be duty-free or see phased reductions. According to the Indian Commerce Ministry, “comprehensive market access for goods, across all sectors” has been ensured.

Key goods provisions include

• Tariff cuts on British products: Iconic UK exports like Scotch whisky, gin, cosmetics, and lamb will benefit from new tariff reductions. For instance, UK duty on whisky is halved (150% → 75%), then phased to 40% in a decade. Tariffs on cars (over 100%) drop to 10% via a quota. UK medical devices, aerospace parts, and electrical machinery also get lower duties. These cuts should boost UK exports: one estimate projects British output could rise by £4.8 bn/year by 2040 thanks to the deal.

• Tariff cuts on Indian products: Almost all Indian exports to the UK become duty-free. Key sectors for India – textiles, garments, auto components, engineering goods, gems and jewellery, pharmaceuticals, leather, and more – gain zero-duty access. For example, Indian textiles (previously facing up to 12% tariff) now enter the UK duty-free. Indian auto parts, engines, and organic chemicals likewise face no UK duty. The financial expressions with companies (e.g., TCS, Dr. Reddy’s) are highlighted as big beneficiaries. Indian whisky (blended) exporters also get some tariff relief as part of a quid-pro-quo for UK’s spirits cuts.

Table 1 below summarizes selected tariff changes and commitments for major products

On services, the FTA includes new commitments although not full market-opening. Both sides agreed national treatment in covered sectors: UK service firms in agreed areas will get the same conditions India grants its own companies. Key covered services include IT/ITeS, professional (architecture, engineering, audit), education, telecoms, construction, and some financial services (insurance). The deal provides easier mobility for certain professionals: business visitors, intra-corporate transferees, contractual services suppliers, independent professionals, and even niche categories (yoga instructors, chefs) all have smoother visa pathway. Digital trade facilitation (promoting paperless trade, interoperability, cybersecurity standards), IP and copyright protection (UK insisted on 60-year minimum copyright term to protect cultural exports), and procurement (UK firms win unprecedented access to India’s public tenders, ~40,000 contracts worth ~£38 bn/year). Regulatory cooperation on standards and sanitary measures is also foreseen to reduce non-tariff barriers.

Economic Implications and Projections

Economists project moderate but meaningful economic gains. The broad consensus is that trade volumes will expand, with knock-on GDP growth and jobs. Key estimates (all from official analyses) include :

• Trade growth: The UK expects to increase bilateral trade by £25.5 bn ($34 bn) by 2040. EY projects India–UK trade (currently roughly $60 bn including services) could double to ~$100–120 bn by 2030. Indeed, both governments have stated targets of roughly doubling bilateral goods trade in 10 years. For reference, goods trade was $20.36 bn in FY23, $21.34 bn in FY24, so rapid growth will be needed to reach those targets.

• GDP impact: The UK Treasury estimates a +£3.3 bn boost to UK GDP by 2035 (equivalent to ~0.1% of GDP). By 2040, an annual boost of £4.8 bn is projected. These numbers are small relative to the UK’s £2.6 trn economy, but still significant. India does not publish similar independent estimates, but doubling export growth and jobs would add to its robust GDP trajectory.

• Sectoral gains: The UK suggests its exports could increase by £400–900 million per year once the deal is phased in. Key UK gains: automotive (£), alcoholic drinks (£), medical tech. India expects textile and engineering goods to surge. One analysis noted “labour- and technology-intensive sectors are to benefit the most” for India.

• Jobs and investment: Millions of workers in both countries stand to gain. India’s textile clusters (Tirupur, Surat) and spice/tea plantations may hire more for exports. In Britain, more car production and marketing jobs (Jaguar Land Rover expansions) and more service jobs in financial/legal sectors could follow. UK FDI into India (currently around $4.2 bn stock) may rise in manufacturing and infrastructure. The public statements emphasize “quality employment” and “job creation” in both economies

Legal and Regulatory Aspects

Finalizing the text clears most legal hurdles, but formal steps remain. Both parliaments will need to approve the deal (the UK requires a vote under the Constitutional Reform and Governance Act), and the UK and Indian legal services will need to transform the agreed text into ratifiable law.

Key outstanding legal issues include :

• Auto quotas: The deal leaves in place tariff-rate quotas on certain products (notably cars). Details of the quotas (volume limits) are yet to be formally published. The UK press notes some smaller quota for spare parts and non-electric vehicles.

• Carbon border taxes: The UK’s impending CBAM (to tax carbon-intensive imports) was a sore point. India sought an exemption, fearing that Indian steel and aluminium might face UK carbon surcharges. The governments have decided to handle CBAM outside the FTA, in separate ongoing talks. This means Indian exports of energy-intensive goods might still face future UK carbon taxes, a political sticking point.

• Bilateral Investment Treaty (BIT): Meanwhile, investment is not covered in the FTA, but India and the UK are negotiating a standalone BIT. It will address investment protection, portfolio flows, and some service sectors (like financial). Progress has been reported but final text is not ready