India, UK set to sign landmark free trade deal

The Union cabinet has approved a landmark free trade agreement with the United Kingdom, clearing the way for its formal signing in London on Thursday, 24 July, during Prime Minister Narendra Modi’s visit to the country.

The agreement follows nearly three years of negotiations and marks India’s first major trade pact with a Western country since it withdrew from the Regional Comprehensive Economic Partnership in 2019.

Both nations aim to double bilateral trade to $120 billion by 2030 from about $55 billion in 2023–24.

Modi, accompanied by commerce minister Piyush Goyal, is expected to meet UK Prime Minister Keir Starmer and senior British business leaders during his visit, with discussions focused on trade, energy, security, and education.

The agreement includes sweeping tariff cuts and greater market access for goods and services on both sides.

Indian import duties on British products such as Scotch whisky, gin, and automobiles will drop significantly.

Tariffs on Scotch whisky will fall immediately from 150% to 75% and gradually to 40% over the next decade.

Indian tariffs on British cars will be capped at 10% under a quota, down from current levels exceeding 100%.

In return, 99% of Indian exports, including textiles, leather, footwear, pharmaceuticals, and electric vehicles, will receive duty-free access to the UK market.

The UK has also agreed to open parts of its public procurement market, valued at around £38 billion annually, to Indian firms and will waive double social security contributions for Indian professionals on short-term assignments, simplifying mobility for skilled workers.

According to UK government estimates, the deal could add £4.8 billion annually to Britain’s GDP by 2040 and lift bilateral trade by about $34 billion per year by that time.

The agreement will be signed in London on Thursday and is expected to come into force by mid-2026 after ratification by the British Parliament and administrative approval in both countries.

Over the coming months, technical working groups will finalize phased tariff reductions, public procurement access, and mobility arrangements.

The deal is seen as a strategic milestone for both economies, opening up significant opportunities in sectors such as textiles, pharmaceuticals, auto components, and luxury goods, while creating a framework for closer economic integration over the next decade.