The United Kingdom and India have finalized a historic Free Trade Agreement (FTA), marking the UK's most significant trade pact since its departure from the European Union in 2020. Announced on May 6, 2025, the deal aims to enhance economic ties between the world's fifth and sixth-largest economies, with projections indicating a £25.5 billion annual increase in bilateral trade by 2040.
Key Provisions of the Agreement
- Tariff Reductions on UK Exports: India will substantially reduce import duties on a range of British products. Notably, tariffs on Scotch whisky and gin will decrease from 150% to 75% immediately, with a further reduction to 40% over the next ten years. Automotive tariffs on UK-made vehicles, such as Jaguars and Land Rovers, will fall from over 100% to 10% under a quota system. Other British goods, including cosmetics, aerospace equipment, medical devices, lamb, salmon, electrical machinery, soft drinks, chocolate, and biscuits, will also benefit from reduced tariffs.
- Benefits for Indian Exports: The UK will eliminate tariffs on 99% of Indian exports, encompassing textiles, footwear, and food products like frozen prawns. This move is expected to provide UK consumers with a wider variety of goods at more competitive prices.
- Economic Impact: The UK government anticipates that the FTA will boost the UK economy by £4.8 billion and increase wages by £2.2 billion over the next 15 years.
This comprehensive FTA is poised to strengthen the economic partnership between the UK and India, fostering growth, creating jobs, and offering consumers in both countries access to a broader range of goods and services.
While the agreement has been finalized, its effective date—the point at which its provisions come into force—has not yet been publicly announced.
For more details, please refer Gov.uk