Modi-Starmer meet: India, UK sign Free Trade Agreement

With Prime Minister Narendra Modi and his UK counterpart Keir Starmer present, India and Britain formally inked the long-awaited Free Trade Agreement on Thursday, paving the way for greater economic cooperation between the two nations.

The India-UK FTA is expected to significantly improve market access and will boost bilateral trade by around $34 billion annually.

The FTA is expected to benefit 99 per cent Indian exports from tariff and will make it easier for British firms to export whisky, cars and other products to India besides boosting the overall trade basket, according to officials.

The trade deal, firmed up after three years of negotiations, is expected to ensure comprehensive market access for Indian goods across all sectors and India will gain from tariff elimination on about 99 per cent of tariff lines (product categories) covering almost 100 per cent of the trade values, they said.

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The new trade pact will bring down average tariffs on exports. For example, India’s average tariff on UK products drops from 15 per cent to 3 per cent.

What PM Modi and Starmer said on FTA

Speaking after the FTA was signed, PM Modi hailed the trade pact as a “historic” deal that would deepen India-UK ties.

Starmer described the FTA as the most significant deal that the UK has signed since it exited the European Union bloc. He said, “It is a deal that will bring huge benefits to both of our countries, boosting wages, raising living standards and putting more money in the pockets of working people. It is good for jobs, it is good for business, putting tariffs and making trade cheaper, quicker and easier.”

PM Modi said, “With the signing of the FTA, Indian textile, footwear, jems and jewellery, and seafood sectors will get better access in the UK market”. "

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“This Agreement is not just an economic agreement but also the plan for a shared prosperity. On one side, Indian textile, footwear, gems and jewellery, seafood and engineering goods will get better market access in the UK. New opportunities will emerge in the UK market for India’s agricultural produce and processed food industry. This agreement will especially benefit Indian youth, farmers, fishermen and the MSME sector. On the other hand, for the people of India and industry, products made in the UK, like medical devices, will be available at reasonable and affordable prices,” PM Modi said after signing the deal.

#WATCH | London, UK: PM Narendra Modi says, "This Agreement is not just an economic agreement but also the plan for a shared prosperity. On one side, Indian textile, footwear, gems and jewellery, seafood and engineering goods will get better market access in the UK. New… pic.twitter.com/q9Yk9e9qbm

— ANI (@ANI) July 24, 2025

How FTA may help Indian businesses and consumers

• India’s leather and footwear exports to the UK could exceed $900 million, marking a major leap forward for the sector as the FTA opens up new opportunities for small artisans and businesses across the country.

• The FTA offers duty-free access to the UK’s $23 billion market. This could translate into a major advantage for Indian Micro, Small and Medium Enterprises (MSMEs) over other countries like Bangladesh, Cambodia, and Pakistan in labour-intensive sectors such as leather and footwear, textiles and clothing, gems and jewellery, furniture, and sports goods.

• The India-UK FTA is likely to enhance the financial stability of small businesses, particularly for artisans, women entrepreneurs, and craftsmen.

• The FTA also aims to encourage MSMEs to utilise digital tools, adopt e-commerce, and transition to more sustainable production methods. These changes could enhance efficiency, enabling Indian products to reach a broader international audience.

• The India-UK FTA provides for stronger intellectual property rights (IPR) and geographical indication (GI) protections. This is likely to help India’s MSMEs and traditional products in getting better global recognition, and thereby higher value in foreign markets.

The India-UK FTA is also expected to help marine products, agriculture, pharmaceuticals, chemicals, electronics, engineering, oilseeds, alcoholic beverages, and soft commodities get greater access to global markets.

(With inputs from agencies)