India and the United Kingdom have reportedly concluded a landmark free trade agreement after three years of negotiations.
India Prime minister Narendra Modi, announced the deal on his official X platform formerly Twitter on Tuesday May 6, 2025.
Modi stated that its Britain’s most significant trade pact since leaving the European Union.
He noted that the deal is expected to increase bilateral trade by £25.5 billion ($34 billion) by 2040.
The agreement was finalized amid growing pressure from U.S. tariffs introduced by President Donald Trump.
Negotiators from both countries had accelerated discussions in response to global trade disruptions.
It also offers reduced tariffs, liberalized market access, and fewer trade restrictions across various sectors.
The agreement lowers duties on goods such as whisky, food products, and auto components.
However, tariffs on lamb, salmon, chocolates, and biscuits will also be reduced under the new deal.
Both sides agreed to quotas for automobile imports, ensuring balanced trade in that sector.
Modi praised the deal’s economic potential.
“These landmark agreements will boost trade, jobs, innovation, and investment in both our countries,” Modi said.
Prime Minister Keir Starmer described the pact as a turning point for the UK’s global trade ambitions.
“We are entering a new era for our economy and trade,” Starmer said on Tuesday.
He emphasized the need to reduce global trade barriers and strengthen economic alliances.
Talks for the deal began in January 2022 but faced multiple delays.
Britain’s political instability, with four prime ministers since 2022, complicated negotiations.
National elections in both countries also contributed to delays in finalizing the agreement.
Despite setbacks, both governments maintained their commitment to completing the trade pact.
The deal symbolizes Britain’s drive for an independent trade policy post-Brexit.
It also marks a major shift in India’s global trade relations.
Both nations are separately negotiating with the United States over Trump-era tariffs.
These U.S. tariffs have disrupted global markets and accelerated UK-India trade talks.
Analysts believe the UK-India deal could reshape trade patterns across Asia and Europe.
The agreement will likely benefit exporters, manufacturers, and technology firms on both sides.
It also signals deeper strategic cooperation between the two nations.
Trade ministers plan to hold follow-up talks on implementation and compliance.
The full text of the agreement is expected to be published later this month.
Economists forecast positive growth impacts for both the UK and India.
The trade pact reflects a shared commitment to open markets and economic resilience.
