So, on May 6, 2025, something big happened—India and the UK finally shook hands on a long-awaited Free Trade Agreement (FTA). This isn’t just some routine paperwork; it’s being called the most significant trade pact for the UK since Brexit. And for India? It’s a pretty major leap in its global trade playbook.
Experts say this deal could pump up trade between the two countries by a whopping £25.5 billion (that’s about $34 billion) each year by 2040. Plus, the UK’s economy is expected to see a £4.8 billion bump in GDP. Not bad for a day’s work, huh?
The Big Stuff in the India-UK Trade Deal
➤ Tariffs? Slashed.
One of the headline moves: India’s cutting tariffs on key British goods. Take Scotch whisky and gin, for example—import duties are dropping from a jaw-dropping 150% to 75% right away, and over the next decade, they’ll go down to 40%. Car tariffs are getting a serious trim too—from over 100% down to 10% (though there’s a quota system involved).
UK Service Firms Get a Leg Up
British service companies are getting easier access to Indian markets. Customs red tape? Loosened up. This should make it smoother for businesses on both ends to operate
Indian Exports Win Big
On the flip side, the UK is scrapping duties on 99% of Indian exports—including staples like textiles, clothing, and food. That means Indian producers get better access, and UK shoppers might see cheaper curry ingredients on their shelves. Win-win.
IT Pros, Rejoice
India also scored better terms for sending its IT professionals to the UK temporarily. The red tape is a bit less tangled now, and they won’t have to pay into the UK’s national insurance system for short stints.
Social Security Sorted
Alongside the main deal, both countries signed something called the Double Contribution Convention. Basically, it smooths out social security contributions for folks working across borders—so they don’t have to pay into two systems at once. Practical and overdue.
Why This Deal Matters
This isn’t just about trade numbers—it’s about strategic partnership. Both countries are strengthening ties not just on paper but in actual industry impact. The Scotch Whisky Association (yes, that’s a thing) called the deal “transformational,” and they’re expecting exports to India to go up by £1 billion in five years.
Prime Ministers Modi and Starmer both gave it a thumbs-up, calling it a milestone in UK-India relations. Fair to say it’s a rare moment of agreement in politics!
Now, just for context—these negotiations have been going on since 2022. There were delays (surprise, surprise), mostly around tariffs and visa rules, but it finally came together after some serious top-level talks.
