India and the United Kingdom are moving swiftly to finalise and formally sign their long-awaited Free Trade Agreement (FTA), with legal text review progressing ahead of schedule. Commerce Secretary Sunil Barthwal is currently in London leading the Indian delegation in meetings with senior UK officials, including Secretary of State for Business and Trade Jonathan Reynolds. The agreement is now expected to be signed by the end of July 2025, following its conclusion on May 6, 2025, after over three years of negotiations.

This landmark FTA is being viewed as a breakthrough in the economic and strategic relationship between the two nations both major democracies and global economic players. The pact is designed not just to facilitate trade flows but also to strengthen long-term economic ties, with a target of doubling bilateral trade to USD 120 billion by 2030.

Major Tariff Reductions and Key Concessions

Among the major outcomes of the agreement are significant tariff reductions on both sides. For Indian exports, the UK has agreed to eliminate tariffs on key labour-intensive sectors such as textiles, rice, spices, and basmati rice, opening new opportunities for Indian SMEs and exporters. The jewellery and gems sector will also benefit from tariff cuts, further supporting India’s export base.

On the other hand, India has agreed to reduce import duties on high-value British products. Tariffs on Scotch whisky and gin, which currently face a 150% duty, will be immediately slashed to 75%, with a gradual reduction to 40% over 10 years.

Other product categories such as medical devices, machinery, and pharmaceutical goods will also benefit from reduced Indian tariffs. In return, Indian pharma and engineering products will receive preferential treatment in the UK, enhancing India’s access to high-value markets.

Stronger Framework for Services and Mobility

The FTA also provides a major boost to the services sector, particularly benefiting Indian professionals in IT, finance, and legal services. The agreement includes new visa quotas and mutual recognition of qualifications, simplifying mobility between both nations.

The pact also addresses the issue of double social security contributions, enabling Indian and British workers to avoid paying into two pension systems for up to three years a move that will reduce costs for employees and employers alike.

Investor Protection, Sustainability and IP Rights

The agreement includes improved measures for investment protection, aimed at building investor confidence and supporting bilateral investment flows. There is a dedicated focus on intellectual property rights (IPR), especially for software, films, pharmaceuticals, and artificial intelligence, ensuring balanced protection and innovation incentives for both parties.

On the sustainability front, the deal commits to climate-resilient trade practices, green technology collaboration, and simplified customs and e-commerce procedures, particularly for SMEs. New B2B component platforms are expected to facilitate cross-border partnerships and supply chain integration.

Conclusion

The agreement stands as one of the most comprehensive FTAs India has negotiated and is expected to significantly reshape trade and investment dynamics between New Delhi and London. As both nations push forward amid a complex global trade environment, this deal represents a strategic milestone balancing market access, development priorities, and long-term sustainability goals.

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