India-UK Trade Deal: FTA Signed; Duty-free Access For 99% Of Indian Products

India and the United Kingdom inked a long-awaited free trade agreement (FTA) in London on Thursday (July 24). The agreement, signed during Prime Minister Narendra Modi’s visit to the UK, comes after years of negotiation and is expected to boost bilateral trade by around $34 billion annually.

The signing of the agreement was accompanied by the presentation of the UK-India Vision 2035, aimed at expanding cooperation in sectors beyond trade. Defence sector is one of the key areas touched upon here.

What benefits does India get from the FTA?

Duty-Free Access: 99% of Indian exports will now have zero duties in the UK, covering textiles, garments, footwear, seafood, agricultural products, gems and jewellery, engineering goods, auto parts, and more.

Market Access: Preferential access to the UK’s $37.5 billion agriculture market, ensuring protection for Indian farmers.

Professional Mobility: Indian professionals gain easier, more flexible access to work in the UK across 35–36 service sectors. They can now reside and work in the UK for up to 2 years without a local sponsor or office in certain categories, benefiting the IT, financial, legal, architecture, and engineering sectors.

Social Security Exemption: Indian workers seconded to the UK for up to 3 years are exempt from UK social security contributions, resulting in cost savings for Indian companies.

Cheaper UK Imports: Indian consumers benefit from lower tariffs and prices on UK goods like medical devices, aerospace parts, cars, chocolate, biscuits, soft drinks, and whisky.

What benefits does the UK get out of the FTA?

Reduced Tariffs into India: Indian tariffs on British goods drop from an average of 15% to 3%, benefiting industries including automobiles, whisky, cosmetics, and electrical machinery.

Boost for British Exports: Whisky tariffs fall from 150% to 75% immediately and down to 40% over a decade. Automotive tariffs (on a quota basis) fall from 110% to 10% for certain models, making UK-made cars much cheaper for Indian consumers.

Access to Indian Public Procurement: UK companies that meet a domestic sourcing threshold can now access India’s vast government procurement market (around $46 billion worth of contracts), being treated on par with Indian bidders.

Investment and Jobs: The FTA is expected to create 2,200+ jobs in the UK and attract £6 billion in new investment and export opportunities, especially in engineering, aerospace, tech, and advanced manufacturing.

Product Variety and Lower Prices: UK consumers gain from greater product variety and lower prices on textiles, footwear, food products, and more