On Saturday, June 7, 2025, Prime Minister Narendra Modi met with the UK Foreign Secretary, David Lammy, in New Delhi, emphasizing the need for a united global front against terrorism. The Prime Minister's call to action occurred amidst the UK's strong condemnation of the recent terror attack in Pahalgam, Jammu and Kashmir.
During the meeting, Foreign Secretary Lammy conveyed the UK's firm support for India's ongoing battle against cross-border terrorism. According to a statement released by the Prime Minister's Office, Lammy "strongly condemned" the Pahalgam attack, which has been a focal point of discussions between the two nations.
Prime Minister Modi, acknowledging the UK's support, stressed the urgency for the international community to take "decisive international action against terrorism and those who support it." This sentiment was echoed in his post on X, where he stated that India values the UK's commitment to combating cross-border terrorism.
Beyond the critical discussion on counter-terrorism, the two leaders also celebrated the successful conclusion of the India-UK Free Trade Agreement (FTA) and the Double Contribution Convention. PM Modi expressed his satisfaction with the constructive engagement from both sides that led to this milestone.
The India-UK FTA, finalized on May 6, 2025, after extensive negotiations, is expected to significantly boost the economic partnership between the two countries. The agreement aims to double trade in goods and services, increasing it from the current $60 billion to $120 billion by 2030. It encompasses various aspects, including tariff reductions, market access, digital trade, government procurement, and intellectual property rights.
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. This includes immediate and staged reductions on key UK exports such as Scotch whisky, automobiles, medical devices, and food and drink. The UK, in turn, will eliminate tariffs on 99% of Indian goods, including clothing, footwear, processed foods, and jewelry.
Foreign Secretary Lammy conveyed the UK's strong interest in enhancing cooperation across key sectors, including trade and investment, defense and security, technology, innovation, and clean energy. He expressed confidence that the FTA will unlock new economic opportunities for both countries. PM Modi also highlighted the growing strength of the India-UK Comprehensive Strategic Partnership and praised the ongoing collaboration under the Technology Security Initiative, calling it a step toward building “trusted and secure innovation ecosystems”.
However, experts have pointed out potential challenges to the FTA's success. One significant concern is the UK's Carbon Border Adjustment Mechanism (CBAM), set to launch in 2027, which could impose a levy on imports from countries with lower or no carbon pricing, potentially affecting Indian exports. The resolution of issues related to the UK's carbon tax and the Bilateral Investment Treaty (BIT) is crucial to fully realizing the FTA's potential.
Despite these challenges, the India-UK FTA is expected to bring numerous benefits, including increased bilateral trade, economic cooperation, investment, and job creation. The UK government projects that the FTA will increase bilateral trade by £25.5 billion and boost UK GDP by £4.8 billion annually in the long run, while supporting India's ambition to become the world's third-largest economy by 2028. It is anticipated that the implementation of the FTA will take at least 10 months from the date of signing, meaning the deal is unlikely to come into effect before the latter half of 2026.
