The two countries hope the accord will boost trade between them by 25.5 billion pounds.
The United Kingdom and India have signed a trade agreement that will reduce tariffs on goods from textiles to whisky, cars and spices and allow more market access for businesses.
British Prime Minister Keir Starmer hailed the agreement on Thursday as a “landmark moment” for both countries. Starmer hosted Indian Prime Minister Narendra Modi at his Chequers country estate, northwest of London, where the UK and Indian trade ministers, Jonathan Reynolds and Piyush Goyal, formally signed the agreement.
Starmer and Modi announced in May that they had struck a free trade agreement after three years of stop-start negotiations, with both sides hastening efforts to clinch a deal in the shadow of tariff turmoil unleashed by United States President Donald Trump. The deal must still be ratified by the UK Parliament.
“This is not the extent or the limit of our collaboration with India,” said Starmer. “We have unique bonds of history, of family and of culture, and we want to strengthen our relationship further, so that it is even more ambitious, modern and focused on the long term.”
Starmer also said the deal was “the biggest and most economically significant trade deal” the UK has made since leaving the European Union in 2020, though the Office for Budget Responsibility (OBR) has forecast that UK exports and imports will be about 15 percent lower in the long run compared with if Brexit had not occurred.
Modi, standing alongside Starmer during a media appearance, described the deal as a “blueprint for our shared prosperity”.
For India, the deal represents its biggest strategic partnership with an advanced economy, and one which could provide a template for a long-mooted deal with the EU as well as talks with other regions.
The two countries also announced almost 6 billion pounds ($8nm) in trade and investment deals in areas including AI, aerospace and dairy products, and pledged to work more closely together in areas such as defence, migration, climate and health.
The UK and India hope the accord will boost trade between the two countries by 25.5 billion pounds ($34.4bn) and eventually add 4.8 billion pounds ($6.5bn) a year to the UK economy.
The UK government said the deal will reduce India’s average tariff on British goods from 15 percent to 3 percent. Import taxes on whisky and gin will be halved from 150 percent to 75 percent before falling to 40 percent by year 10 of the deal. Automotive tariffs will fall from more than 100 percent to 10 percent under a quota.
India’s Ministry of Commerce and Industry said in May that 99 percent of Indian exports will face no import duty under the deal, which applies to products including clothes, shoes and food.
Britain and India are the sixth and fifth largest global economies respectively, with a trade relationship worth about 41 billion pounds ($55.3bn) and investment supporting more than 600,000 jobs across both countries.
During Modi’s two-day visit, Starmer and the Indian prime minister were also likely to discuss last month’s Air India disaster in which 241 people died when a London-bound flight crashed after taking off from Ahmedabad in western India.
Some 169 Indian passengers and 52 British nationals were killed in the June 12 crash, one of the deadliest plane disasters in terms of the number of British fatalities.
Starmer and Modi have met twice recently, at the G7 summit in Canada last month and at the G20 meeting in Brazil last year.
Modi was also due to meet with King Charles III during his brief stay in the UK, his fourth visit since becoming India’s leader in 2014.
https://www.aljazeera.com/news/2025/7/24/uk-and-india-sign-free-trade-agreement-during-modi-visit?traffic_source=rss
