India and the UK have signed a Free Trade Agreement (FTA) and unveiled a forward-looking bilateral framework titled UK-India Vision 2035. Signed in the presence of Prime Minister Narendra Modi and his British counterpart Keir Starmer in London, the pact will enhance trade and investment besides spurring defence ties and technology collaboration.
The trade deal is expected to increase bilateral trade by £25.5 billion annually, marking India’s most comprehensive trade agreement to date. And it’s the UK’s most significant bilateral trade deal since exiting the European Union. It aims to generate thousands of jobs, reduce tariffs and deepen access to each other’s markets.
“Our landmark trade deal with India is a major win for Britain,” said Prime Minister Keir Starmer. “It will create thousands of British jobs, unlock new opportunities for businesses and drive growth across the country—delivering on our Plan for Change.”
The partnership is not limited to commerce. The UK-India Vision 2035 outlines a decade-long roadmap for cooperation spanning defence, clean energy, innovation, border security, climate action and education. The agreement also includes a new Defence Industrial Roadmap, which will foster closer military and industrial collaboration.
Business and Trade Secretary Jonathan Reynolds emphasised the strategic importance of the pact. “India is one of the fastest-growing global economies and a rising economic superpower. This historic deal places the UK in a strong position to work alongside India over the next decade,” he said. “The nearly £6 billion in new investments and export agreements announced today are just the beginning. Collaboration will now extend into advanced technologies, critical minerals and green finance.”
Trade Deal Highlights
- Tariff reductions: Average tariffs on British exports to India, including cars, medical devices, soft drinks and cosmetics will drop from 15% to 3%, making British goods more accessible to Indian consumers.
- Market access for UK firms: The deal ensures equal treatment for UK companies operating in India, particularly in the insurance and financial services sectors, by binding India’s foreign investment caps.
- Energy sector gains: The UK’s clean energy firms will gain unprecedented access to India’s public procurement, supporting India’s shift to renewable energy amid rising demand.
- Boost to UK exports: Liberalised tariffs will also make it easier and more cost-effective for British consumers and businesses to import goods from India.
Business Deals And Investments
A total of 26 UK companies have announced new ventures in India. Aviation giant Airbus will soon begin deliveries of aircraft to Indian airlines, under contracts worth around £5 million. Over half of the aircraft will be powered by Rolls-Royce engines.
In addition, the UK and India have pledged to step up collaboration on security challenges. That includes fight against corruption, fraud, organised crime and illegal migration through increased intelligence sharing and joint operations.
The UK government will now prepare the trade deal for ratification in Parliament, allowing businesses to begin reaping its benefits.
This summit also marks the first anniversary of the UK-India Technology Security Initiative. And both countries reaffirmed their commitment to harnessing emerging technologies to safeguard national interests and build future-ready economies.
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