India and the United Kingdom have concluded an “ambitious and mutually beneficial” free trade agreement (FTA) that will deepen the bilateral comprehensive strategic partnership and catalyse trade and investment, Prime Minister Narendra Modi said on Tuesday after a conversation with his British counterpart Keir Starmer.
The deal was finalised three years after Modi and his former British counterpart Boris Johnson set a target of concluding the FTA by October 2022. Since then, the negotiations had been affected by differences on a range of issues, including tariffs on alcohol and automobiles, and political turmoil in the UK.
“Delighted to speak with my friend PM @Keir_Starmer. In a historic milestone, India and the UK have successfully concluded an ambitious and mutually beneficial Free Trade Agreement, along with a Double Contribution Convention,” PM Modi said in a post on X on Tuesday evening.
“These landmark agreements will further deepen our Comprehensive Strategic Partnership, and catalyse trade, investment, growth, job creation, and innovation in both our economies. I look forward to welcoming PM Starmer to India soon,” he said.
The two leaders described the development as a historic milestone that will foster trade, investment, innovation and job creation in both economies. They agreed that the agreements between the “two big and open market economies” will open new opportunities for businesses, strengthen economic linkages, and deepen people-to-people ties, according to a readout from the Indian side.
Starmer said “strengthening alliances and reducing trade barriers with economies around the world” is part of the UK’s “Plan for Change” to deliver a stronger and more secure economy, the readout said.
Further details about the trade deal were expected by Tuesday evening in the form of formal announcements by both sides. The breakthrough in the trade negotiations followed two back-to-back visits to the UK last week by commerce minister Piyush Goyal for meetings with British trade secretary Jonathan Reynolds to push the talks across the finish line.
According to the UK government’s latest trade data, India was Britain’s 11th largest trading partner in the four quarters to the end of Q4 2024 and accounted for 2.4% of total UK trade.
Total trade in goods and services between India and the UK was worth £42.6 billion in the four quarters to the end of Q4 2024, an increase of 8.3% from the four quarters to the end of Q4 2023. This included Indian exports to the UK worth £25.5 billion in the four quarters to the end of Q4 2024 (an increase of 10.1% compared to the four quarters to the end of Q4 2023), and UK exports to India amounted to £17.1 billion in the same period (an increase of 5.8% compared to the four quarters to the end of Q4 2023).
