India and the U.Okay. will sign a free trade agreement on Thursday (July 24, 2025) in London that may permit export of labour-intensive merchandise equivalent to leather-based, footwear and clothes at concessional charges, whereas making imports of whisky and vehicles from Britain cheaper.
The pact additionally helps double trade between the 2 economies to $120 billion by 2030.
Also Read: Caution and optimism: On India’s FTA with the United Kingdom
The pact, formally known as a complete financial and trade agreement, might be signed in the presence of Prime Minister Narendra Modi and British Prime Minister Keir Starmer.
Commerce and Industry Minister Piyush Goyal and his British counterpart Jonathan Reynolds would sign the agreement. Once the pact is signed, it is going to require approval from the British Parliament earlier than it may take impact. The course of might take a few 12 months.
PM Modi on Wednesday (July 23, 2025) left on a four-day go to to the U.Okay. and the Maldives.
The two international locations introduced the conclusion of the negotiations for the trade agreement on May 6.
The pact has chapters on points together with items, providers, innovation, authorities procurement, and mental property rights.
The two international locations have additionally concluded the negotiations for the Double Contribution Convention Agreement, or social safety pact. It would assist keep away from double contribution to social safety funds by Indian professionals working for a restricted interval in Britain.
In such trade agreements, two international locations both eradicate or considerably scale back customs duties on most items traded between them. They additionally ease norms for selling trade in providers and bilateral investments.
Under the pact, 99% of Indian exports would profit from zero obligation in the U.Okay. market.
The primary proposals of the agreement embody slashing of import obligation on British Whisky and gin from 150% to 75% earlier than lowering to 40% by ten years of the deal; automotive tariffs might be decreased from over 100% to 10% underneath a quota.
Other items with decreased import duties, which might open markets and make trade cheaper for companies and Indian shoppers, embody cosmetics, aerospace, lamb, medical gadgets, salmon, electrical equipment, delicate drinks, chocolate and biscuits.
It will open export alternatives for home labour-intensive sectors equivalent to textiles, marine merchandise, leather-based, footwear, sports activities items and toys, gems and jewelry, engineering items, auto elements and engines, and natural chemical substances.
On the providers entrance, the agreement eases mobility for professionals together with Contractual Service Suppliers; Business Visitors; Investors; Intra-Corporate Transferees; companions and dependent kids of Intra-Corporate Transferees with proper to work; and Independent Professionals like yoga instructors, musicians and cooks.
India’s exports to the U.Okay. rose by 12.6% to $14.5 billion, whereas imports grew by 2.3% to $8.6 billion in 2024-25.
The bilateral trade between India and the U.Okay. elevated to $21.34 billion in 2023-24 from $20.36 billion in 2022-23.
