Union Cabinet approves India-UK Free Trade Agreement ahead of PM Modi's London visit

The Union Cabinet on Tuesday approved the India–UK Free Trade Agreement (FTA), just days before Prime Minister Narendra Modi’s scheduled visit to the United Kingdom, where he is expected to formally sign the deal with British Prime Minister Keir Starmer on June 24. Commerce Minister Piyush Goyal will also accompany him for the great milestone completion.

Although the agreement was announced on May 6, the full text was held back pending final legal review.

The trade pact, however, will only take effect once it is ratified by the British Parliament.

PM Modi’s trip includes a four-day visit to the UK and the Maldives, beginning Wednesday. The deal comes after years of political upheaval in the UK, which saw three different Prime Ministers before the Labour Party returned to power with a strong majority.

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This marks India’s first major trade deal with a Western nation since it opted out of the China-led RCEP in 2019.

The agreement is set to boost access for Indian exports, especially in textiles and leather, while also addressing concerns over the UK’s Carbon Border Adjustment Mechanism (CBAM) that could impact India’s metal exports.

In return, India will allow phased entry of high-end British cars and whisky.

The Commerce Ministry said the FTA covers almost all of India’s export interests, with tariffs eliminated on about 99% of trade lines, representing nearly the entire trade value. It aims to strengthen ties between India’s and the UK’s advanced services sectors.

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The pact includes chapters on trade in goods and services, innovation, intellectual property, government procurement, and also finalizes a social security agreement between the two countries.