India-UK FTA: India and the United Kingdom on Thursday signed a landmark Free Trade Agreement (FTA), which Prime Minister Narendra Modi described as a “historic” moment and a “blueprint for shared prosperity.”
Signed during PM Modi’s official visit to London, the pact is expected to raise bilateral trade by $34 billion annually and offer wide-ranging benefits to Indian farmers, MSMEs, professionals, and exporters.
The signing, which took place in the presence of Commerce Minister Piyush Goyal and UK Business Secretary Jonathan Reynolds, provides 99 per cent of Indian exports with duty-free access to the UK and opens new avenues for cooperation in goods, services, investment, and talent mobility.
The talks with PM Keir Starmer were outstanding, particularly in the wake of the successful signing of the Comprehensive Economic and Trade Agreement. In addition to economic cooperation, this agreement sets the stage for boosting shared prosperity. @Keir_Starmer… pic.twitter.com/PQD1f2zu2M
— Narendra Modi (@narendramodi) July 24, 2025
Here’s a look at what gets cheaper for Indian exporters and benefits Indian citizens under the FTA
Also Read: India-UK FTA: PM Modi signs historic pact with British counterpart to double bilateral trade to $120 billion by 2030
Affordable UK-made medical devices
The FTA will reduce costs on imported medical equipment and devices such as heart stents, surgical tools, and diagnostic machines, benefiting Indian hospitals, clinics, and patients alike
Example: A UK-imported MRI machine could now cost 10 to 15 per cent less, easing capital expenditure for private healthcare providers.
Cheaper aerospace and high-tech parts
Indian aviation, space, and defence industries stand to benefit from lower duties on UK-made aerospace components and industrial machinery.
Example: Airlines and defence contractors may now source aircraft parts or engines from UK suppliers at reduced landed costs.
Luxury cars and cosmetics to get more affordable
Tariffs on UK-made luxury goods such as Jaguar Land Rover cars, cosmetics, and wines will drop from an average of 15 per cent to 3 per cent.
Example: A luxury car priced at Rs 1 crore could become Rs 7–10 lakh cheaper in India, depending on final dealer pricing.
Big drop in whisky prices
Import duties on UK-origin whisky will be reduced from 150 per cent to 75 per cent immediately, and further phased down to 40 per cent over ten years.
Example: A premium bottle of Scotch that currently retails for Rs 5,000 may now cost around Rs 3,500 or lower after full tariff reductions.
How does Indian economy benefit?
Farmers and fishers get direct access to the UK market
India’s agriculture and food processing sectors are among the biggest winners under the India-UK FTA. The UK has removed import duties on over 95 per cent of India’s agricultural and processed food items.
This includes:
- Spices such as turmeric, pepper, and cardamom
- Processed items like mango pulp, pickles, pulses, and spice mixes
- Ready-to-eat meals and fruit-based products
Example: Indian turmeric sold in UK supermarkets could become Rs 100 to 150 cheaper per kilogram, making it more competitive and increasing profits for Indian exporters.
Marine exporters to benefit
The UK has scrapped duties of up to 20 per cent on Indian seafood. This move will directly benefit coastal states such as Andhra Pradesh, Kerala, Tamil Nadu, and Odisha, where marine exports are a key part of the economy.
Indian fishers and exporters can now access the UK’s $5.4 billion seafood market with better margins and improved competitiveness.
Boost for labour-intensive industries
Labour-heavy Indian industries such as textiles, leather, gems and jewellery, toys, sports goods, and engineering products will now enjoy duty-free access to the UK.
- Tariffs of up to 12 per cent on textiles are now zero
- Tariffs of 10 per cent on base metals like aluminium, copper, and steel are also removed
This will make Indian products cheaper in the UK, helping manufacturers secure larger orders and create more jobs in India.
Indian professionals gain mobility and savings
Under the Double Contribution Convention, Indian professionals working in the UK will not have to pay into the UK’s social security system for three years.
Example: An Indian worker earning Rs 50 lakh per year in the UK could save up to Rs 2.5 lakh annually, or Rs 7.5 lakh over three years. In addition, visa procedures have been simplified for professionals like architects, engineers, chefs, yoga instructors, and IT workers, making it easier for Indian talent to work in the UK.
A trade pact focused on Indian interests
The agreement allows 99 per cent of Indian exports to enter the UK duty-free, giving Indian businesses a fair playing field with European competitors.
It also includes measures to:
- Promote sustainable and inclusive trade
- Improve the ease of doing business
- Support MSMEs, startups, and rural entrepreneurs
This aligns with India’s Viksit Bharat 2047 vision of becoming a developed economy.
PM Modi: ‘This is a Blueprint for Prosperity’
After signing the agreement, Prime Minister Modi said, “This Agreement does not merely pave the way for economic cooperation but also sets the foundation for our shared prosperity. Indian youth, farmers, fishermen, and MSMEs stand to gain.”
He also introduced the India-UK Vision 2035, a roadmap for strategic cooperation in technology, defence, climate, education, and people-to-people ties.
