UK Foreign Secretary David Lammy is in New Delhi this weekend to further discussions on strengthening ties between the United Kingdom and India, with trade and migration topping the agenda. This visit follows the recent finalization of a historic Free Trade Agreement (FTA) between the two nations on May 6, 2025, after three years of negotiations. The FTA is expected to significantly boost bilateral trade and investment, marking a new era in the economic relationship.
The UK sees the FTA as its most significant trade agreement since Brexit, while India views it as a step towards deeper integration into global value chains. The agreement is projected to increase bilateral trade by over £25 billion annually and boost the UK's GDP by £4.8 billion in the long run. It also supports India's ambition to become the world's third-largest economy by 2028.
Under the FTA, India has agreed to reduce or eliminate tariffs on 90% of product lines for UK exports, with 85% becoming fully tariff-free within a decade. Key UK exports that will benefit from these tariff reductions include Scotch whisky, automotive products, medical devices, and food and drink. The UK, in turn, will eliminate tariffs on 99% of Indian goods, including clothing, footwear, processed foods, and manufactured products.
The agreement also extends beyond goods and services to cover digital trade, government procurement, intellectual property, labor, and environmental standards. For the first time, UK businesses will have access to India's government procurement market, estimated at over £38 billion annually. The FTA also includes provisions to support small and medium-sized enterprises (SMEs) through information sharing and streamlined customs procedures.
During his visit, Foreign Secretary Lammy will meet with Prime Minister Narendra Modi and External Affairs Minister Dr. S Jaishankar to discuss ways to deepen and diversify the Comprehensive Strategic Partnership between the two countries. Discussions will focus on delivering growth, fostering innovative technology, tackling climate change, and addressing migration priorities. Progress on the migration partnership, including safeguarding citizens and securing borders, will also be reviewed.
In addition to trade and economic matters, Lammy is expected to address regional security issues, including the recent escalation in tensions following the Pahalgam terrorist attack. The UK has been actively involved in supporting efforts to reduce tensions and ensure a durable peace in the region.
The FTA is expected to create numerous opportunities for growth in various sectors. Lower tariffs and streamlined regulations are expected to boost India's export performance. Sectors such as automobiles, whisky, industrial machinery, and pharmaceuticals are anticipated to experience significant gains. The agreement is also set to open lucrative prospects for India's gems and jewelry sector.
Overall, Foreign Secretary Lammy's visit to India underscores the UK's commitment to strengthening its relationship with India, a key partner in the Indo-Pacific region. The FTA is a testament to this commitment, and both countries are eager to move forward with its implementation to unlock the full potential of their economic partnership.
