India-UK Free Trade Agreement (FTA) 2025: A Landmark Deal

In a historic move, India and the United Kingdom have successfully concluded a comprehensive Free Trade Agreement (FTA) after nearly three years of negotiations. This milestone agreement brings together the world’s fifth and sixth largest economies, reflecting a deepening of economic ties.

Trade Snapshot (2024):
Total Bilateral Trade: £42.6 billion
UK Exports to India: £17.1 billion
UK Imports from India: £25.5 billion

The UK is India’s 4th largest export destination, while India ranks as the UK’s 11th largest trading partner.
According to Reuters, Britain said the deal was the "biggest and most economically significant" bilateral trade agreement it had signed since leaving the European Union in 2020.

Key Highlights of the India-UK FTA:
1. Tariff Elimination
99% of Indian exports to the UK will now enjoy zero-duty access, unlocking massive opportunities for sectors like textiles, leather, marine products, engineering goods, auto parts, and organic chemicals.
2. Goods and Services
Alcoholic Beverages: Tariffs on whisky and gin will be reduced from 150% to 75%, and further down to 40% by the tenth year—a major boost to the UK’s Scotch whisky industry and consumers in India.
India will also cut automotive tariffs to 10% under a quota from over 100% currently. Other British goods categories which will face lower tariffs include cosmetics, aerospace, lamb, medical devices, salmon, electrical machinery, soft drinks, chocolate and biscuits.
3. Ease of Mobility for Professionals
The agreement facilitates smoother movement for investors, intra-corporate transferees, independent professionals, and their partners/dependents with work rights.
4. Social Security Relief
Under the Double Contribution Convention, Indian workers posted temporarily in the UK—and their employers—will be exempt from UK social security contributions for up to three years.
5. Youth and Digital Opportunities
The deal opens up access for skilled Indian youth to benefit from the UK’s digitally delivered services and infrastructure.
6. Export Growth Sectors for India
Indian industries in textiles, marine products, leather, footwear, engineering goods, auto parts, and organic chemicals are poised to gain from better market access and increased competitiveness.
7. Boost to Services Sector
The agreement is expected to unlock new opportunities and job creation in IT/ITeS, financial services, and other knowledge-based industries.

With bilateral trade projected to double by 2030, this FTA sets a gold standard for India’s future global trade engagements and strengthens its position as a trusted partner on the global stage.