India and the UK Sign Historic Free Trade Agreement Following Three Years of Discussions

By 2040, the UK and India will have increased their bilateral commerce by £25.5 billion thanks to a significant free trade agreement.

Following three years of sporadic talks, Britain and India have finally inked a free trade deal, which is a major step forward for their respective post-pandemic economic plans.

The deal was reached in the midst of global trade disruptions brought on by former US President Donald Trump’s tariff measures, which increased the need for both parties to strengthen their bilateral connections.

It is anticipated that the new agreement between the fifth and sixth largest economies in the world will boost trade by an extra £25.5 billion ($34 billion) by 2040. It calls for loosened trade restrictions, expanded market access, and significant tariff reductions on products like vehicles, whisky, food items, and advanced manufacturing components. Auto imports have also been subject to quotas.

In this “new era for trade,” Indian Prime Minister Narendra Modi praised the agreement as “ambitious and mutually beneficial,” while British Prime Minister Keir Starmer characterized it as a move toward fortifying partnerships and lowering trade obstacles.

The agreement will allow more British companies to bid for contracts in India’s public and private sectors. Although Britain’s points-based immigration system will not alter, it will also make it simpler for Indian people to go to the country in search of job.

Importantly, the deal shows that India is open to opening up formerly protected areas of its economy, like the car industry, and offers a model for how it may interact with other significant Western economies, such as the US and the EU.

Reiterating its global trade agenda and expanding its economic partnerships outside of Europe, the accord is regarded as the UK’s most important trade agreement since it formally exited the European Union in 2020.

Although both countries are still pursuing separate agreements with the US to lift trade restrictions put in place under Trump’s administration, this UK-India pact shows a proactive effort toward bilateral economic resilience in the face of persistent uncertainties in the world economy.