While a comprehensive Free Trade Agreement (FTA) between India and the United Kingdom has been agreed upon, its formal signing and implementation may still take several months. Both nations have signaled strong commitment to strengthening their economic partnership, but the finalization process involves legal procedures and parliamentary requirements that necessitate time.
Commerce Minister Piyush Goyal recently met with the UK's Jonathan Reynolds in London to discuss the FTA's implementation. The agreement aims to eliminate duties on Indian exports and double bilateral trade to $120 billion by 2030. The FTA, which was concluded on May 6, 2025, seeks to boost economic growth by increasing UK businesses' access to India's rapidly expanding economy, projected to become the world's third-largest by 2028.
The FTA is expected to significantly accelerate trade between the UK and India, increasing bilateral trade by £25.5 billion. Of this, £15.7 billion is expected to come from rising exports from UK businesses into India. The agreement is projected to increase UK GDP by £4.8 billion (0.1%) each year in the long term. Workers in the UK are also expected to benefit, with wages growing by an estimated £2.2 billion each year in the long term.
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, automotive products, medical devices, cosmetics, aerospace components, and food and drink. The UK, in turn, will eliminate tariffs on 99% of Indian goods, including clothing, footwear, processed foods, jewelry, and a wide array of manufactured products.
As soon as the deal comes into force, 64% of tariff lines will be eligible for tariff-free imports into India, covering £1.9 billion of current UK exports to India (2022). After a staging period of 10 years, the agreement will mean 85% of tariff lines and 66% of existing Indian imports from the UK will be eligible for tariff-free entry into India. UK products will benefit from savings of up to an estimated £400 million a year from India cutting its tariffs on existing trade alone, which could increase to around £900 million a year after the staging period.
The FTA also includes provisions for services, investment, and professional mobility. For the first time, UK businesses will have access to India's government procurement market, estimated at over £38 billion annually. The agreement provides preferential treatment for UK-origin products and services and promotes small and medium-sized enterprises (SMEs) through information sharing and streamlined customs procedures.
While student visas were not part of the negotiations, the deal could bring other benefits to international students. Indian nationals seconded temporarily to the UK will not have to pay national insurance contributions for three years. New digital commitments will support electronic contracts and transactions, making it easier for SMEs to enter the Indian market.
Both sides have protected each other's sensitivities, with the dairy sector being sensitive for India and sugar and milled rice for the UK. The legal scrubbing of the treaty, which consists of thousands of pages, will take a couple of months, and it will take about a year to get it through parliament.
The India-UK relationship is founded on mutual interests, with close cooperation on issues such as education and research, energy security and climate change, security and defense, and international relations. The FTA is expected to further strengthen these ties, opening new opportunities for skills, entrepreneurship, knowledge, and cross-border collaboration.
