India and the United Kingdom have finally signed a long-awaited Free Trade Agreement (FTA), marking a major economic breakthrough. The India-UK FTA deal, under talks since January 2022, is now set to enhance trade in goods and services, fuel job creation, and stimulate innovation across both nations. Prime Minister Narendra Modi called it a “historic milestone” that strengthens the Comprehensive Strategic Partnership between India and the UK.
The agreement also includes a Double Contribution Convention, easing social security norms for Indian professionals working in the UK. This FTA is being celebrated as the most comprehensive and ambitious trade pact India has ever signed, with Commerce Secretary Sunil Barthwal terming it a “gold standard” for future negotiations.
Indian Sectors Gaining Big: Textiles, IT & Services
Indian exporters now have a major reason to cheer. The UK has agreed to remove tariffs on 99% of trade lines, covering nearly all the trade volume. This means big wins for sectors like textiles, leather, carpets, marine products, and auto components—all of which previously faced duties of 4–16%.
Labour-intensive industries such as toys, gems and jewellery, and sports goods are also expected to thrive. The FTA goes beyond goods—it creates more openings for Indian IT, professional, and financial services. Professionals like yoga instructors, chefs, architects, and engineers will now find easier access to the UK job market.
The agreement ensures smoother movement for contractual service suppliers, investors, and intra-corporate transferees, unlocking significant potential for India’s skilled workforce.
What the UK Gets: Whisky, Autos, and Tariff Relief
India, in turn, is slashing tariffs on 90% of UK goods, including luxury items and medical products. The headline-grabbing move is the reduction of whisky tariffs from 150% to 40% over ten years. British exports of cosmetics, lamb, salmon, electrical goods, and biscuits will also benefit from reduced costs and easier market access.
The UK government estimates the deal could add £25.5 billion to bilateral trade, boosting GDP by £4.8 billion and increasing wages. British shoppers may see cheaper products, especially in clothing, electronics, and food sectors.
FTA Beyond Trade: Mobility, Innovation & Digital Services
The deal also secures India’s interest in digitally delivered services, allowing Indian firms to leverage the UK’s advanced digital infrastructure. From software and telecom to fintech and education, the scope is vast.
Under the Double Contribution Convention, Indian professionals posted in the UK won’t need to pay into the UK’s social security for three years—saving costs for both workers and employers.
This FTA paves the way for deeper collaboration in R&D, innovation, and high-skill employment, especially in sectors where India and the UK have strong complementarities.
Disclaimer: The views and investment insights provided here are based on publicly available information and do not constitute financial advice. Readers are advised to conduct their own research or consult certified financial experts before making investment decisions.
