India, UK to ink FTA today: Trade, defence, energy on Modi-Starmer agenda

The Free Trade Agreement is being described as India's most comprehensive trade pact ever and the UK's most significant since Brexit

India and the United Kingdom are set to sign a historic Free Trade Agreement (FTA) on Thursday during Prime Minister Narendra Modi’s official visit to the country. The FTA is expected to deepen economic ties between the two nations while also setting the stage for an ambitious new roadmap — the UK-India Vision 2035 — that expands cooperation well beyond trade.

 

The signing will take place at Chequers, the official country retreat of British Prime Minister Keir Starmer, marking a key milestone in India-UK relations.

 

What the Free Trade Agreement offers

 

The FTA aims to enhance bilateral trade by £25.5 billion annually and is being described as India’s most comprehensive trade pact ever and the UK’s most significant since Brexit. It will sharply reduce tariffs, ease market access for key goods and services, and offer benefits to both consumers and businesses.

 

 

Tariff reductions will make British goods like whisky, gin, cars, cosmetics, and medical devices more affordable in India. At the same time, Indian exports such as textiles, leather, marine products, and jewellery will enjoy easier access to the UK market.

 

Indian goods will receive zero-duty access for 99 per cent of products, which is expected to benefit India’s MSME and labour-intensive sectors.   

 

PM Modi’s UK visit agenda

 

Prime Minister Narendra Modi arrived in the UK on Wednesday as part of his July 23-26 trip that also includes a visit to the Maldives.

 

On Thursday, July 24, PM Modi will meet his counterpart Keir Starmer at Chequers. The trade pact will be signed in the presence of both leaders by India’s Commerce Minister Piyush Goyal and UK Business and Trade Secretary Jonathan Reynolds.

 

Ahead of his departure, PM Modi said, “India and the UK share a Comprehensive Strategic Partnership that has witnessed significant progress in recent years.”

 

Vision 2035: Beyond trade

 

The India-UK Vision 2035 roadmap aims to broaden ties across multiple areas:

-A new defence industrial roadmap

-Joint action on climate change and renewable energy

-Stronger border security cooperation

-Deeper education and research partnerships

 

Calling the agreement a “major win for Britain", Starmer said, “It will create thousands of British jobs, unlock new opportunities, and help families with the cost of living.”

 

India-UK FTA: Sectors that will gain the most

 

Indian exports likely to benefit:

-Leather, textiles and apparel

-Toys and sports goods

-Gems and jewellery

-Marine products

 

British goods to see tariff cuts:

-Whisky and gin (from 150 per cent to 40 per cent in 10 years)

-Automobiles (from over 100 per cent to 10 per cent, under a quota system)

-Chocolates, cosmetics, medical devices

-Machinery and aerospace parts

 

The clean energy sector in the UK is also expected to gain access to India’s vast procurement market, which is critical as India expands its renewable energy push.

 

The FTA also includes a “double contribution convention” that exempts Indian workers and firms from UK social security payments for three years. Indian businesses will also gain entry into Britain’s public procurement sectors, such as transport, healthcare, and energy.

 

Meanwhile, British companies investing in India may receive priority under India’s 'Make in India' policy.

 

India-UK FTA today: What is excluded?

 

India has protected certain sensitive sectors, especially agriculture. Products like apples and dairy items have been kept out to safeguard domestic farmers.

 

Tariff reductions on whisky and automobiles will follow a phased schedule, with cars coming under a managed quota regime.

 

What happens after the deal is signed?

 

After today’s signing, the FTA will require approval from the Union Cabinet and ratification by the British Parliament. Full implementation could take up to a year.

 

Both nations are aiming to double bilateral trade to $120 billion by 2030. As India’s middle class expands and its import demand grows, the agreement is set to play a crucial role in shaping future economic relations.