The Free Trade Agreement (FTA) between India and the United Kingdom (UK) has finally been signed, marking the beginning of a new chapter of economic cooperation between the two countries. Formal consent was given to this agreement on May 6, 2025.
UK Prime Minister Keir Starmer has described this agreement as “historic,” noting that it will boost new investment, job creation, and help the growth of the economy in Britain. Discussions on this agreement have been ongoing for the past three years. Both governments have negotiated extensively to facilitate trade, investment, production, and services. Now, after the implementation of this agreement, India-UK relations will become stronger.
India will reduce import duties on 90% of British products, while 85% of them will be completely exempted. 99% of India's export goods will receive concessions or duty-free access in the UK. This will greatly benefit sectors such as textiles, gems and jewelry, engineering products, medical equipment, as well as British Scotch and luxury cars. According to the UK government estimates, this will contribute 4.8 billion pounds to Britain's GDP and increase annual wages by 2.2 billion pounds.
This agreement will contribute to skill development, employment in the service sector, and increasing the presence of Indian companies in foreign markets. Especially, new opportunities will be available for startups and IT service providers. In line with this agreement, both countries have announced the long-term policy ‘UK-India Vision 2035’. This framework emphasizes increasing cooperation in areas such as defense, energy, artificial intelligence, green technology, and research.