On July 24, 2025, British Prime Minister Keir Starmer and Indian Prime Minister Narendra Modi signed a significant Free Trade Agreement (FTA) at Chequers, the UK Prime Minister's official country residence. This agreement marks a pivotal moment in strengthening the economic ties between the two nations.
The FTA encompasses a comprehensive reduction of tariffs on a wide range of goods and services. India has agreed to lower tariffs on 90% of UK exports, including products such as whisky, automobiles, and medical devices. Notably, tariffs on UK whisky and gin will decrease from 150% to 75%, and further to 40% over the next decade. Additionally, automotive tariffs will be reduced from over 100% to 10% under a quota system. In return, the UK will eliminate tariffs on 99% of Indian goods, covering sectors like textiles, footwear, and agricultural products.
Beyond goods, the agreement facilitates enhanced market access for services. UK businesses will gain improved access to India's government procurement market, valued at approximately £38 billion annually. The FTA also introduces measures to ease the movement of professionals between the two countries, including provisions for business visitors, contractual service providers, and independent professionals such as chefs and yoga instructors.
Economically, the FTA is projected to boost bilateral trade by £25.5 billion annually by 2040 and contribute £4.8 billion to the UK economy each year. This deal is considered the UK's most economically significant bilateral trade agreement since leaving the European Union.
Both leaders emphasized the importance of this agreement in fostering a more interconnected and prosperous future for both nations, highlighting the shared vision for economic growth and collaboration.