The recently concluded Free Trade Agreement (FTA) between India and the United Kingdom is expected to substantially boost bilateral trade, potentially adding £25.5 billion annually by 2040. This landmark agreement, finalized after nearly three and a half years of negotiations, aims to deepen the Comprehensive Strategic Partnership between the two nations, catalyzing trade, investment, and job creation in both economies.

The FTA focuses on enhancing market access and reducing trade restrictions. Tariffs on a wide array of goods will be slashed, with India agreeing to reduce tariffs on products including whisky, medical devices, advanced machinery, and lamb, making UK exports more competitive. Based on 2022 trade figures, India's tariff cuts will amount to over £400 million when the deal comes into force, more than doubling to around £900 million after 10 years. The UK will also benefit from reduced tariffs on key exports such as Scotch whisky and automobiles. Levies on aerospace, electricals, and other food products will also fall. Specifically, tariffs on whisky and gin will be halved from 150% to 75% initially, before reducing to 40% by the tenth year of the deal. Automotive tariffs will also see a significant reduction from over 100% to 10% under a quota.

In return, the UK will reduce tariffs on Indian imports, including textiles, apparel, footwear, and certain food products like frozen prawns. This is expected to lead to cheaper prices and greater choice for British consumers. Overall, 90% of tariff lines will be reduced, with 85% becoming fully tariff-free within a decade. 99% of Indian exports are expected to benefit from duty-free access to UK markets.

Beyond tariff reductions, the FTA includes a Double Contribution Convention, also known as a social security agreement, which aims to protect the interests of skilled, professional cross-border workers. The FTA is projected to boost the UK's GDP by £4.8 billion annually and increase wages by £2.2 billion in the long term.

The agreement has been hailed as a "historic milestone" by Prime Minister Narendra Modi and a "landmark trade deal" by British Prime Minister Keir Starmer. Richard Heald, OBE, Chair of the UK-India Business Council (UKIBC), welcomed the agreement, emphasizing its significance in deepening economic and strategic ties between the two nations. Mark Kent, Chief Executive of the Scotch Whisky Association, described the deal as "transformational," with the potential to increase Scotch Whisky exports to India by £1 billion over the next 5 years and create 1,200 jobs across the UK. The Premier League also lauded the agreement, recognizing India's importance and potential.