India and the United Kingdom have signed a historic free trade agreement (FTA) that is set to boost annual bilateral trade by nearly $34 billion. Finalised during Prime Minister Narendra Modi’s UK visit, the pact introduces tariff reductions, smoother professional mobility, and stronger market access provisions, making it one of India’s most extensive trade deals.
The agreement grants Indian exporters duty-free entry into the UK’s $23 billion market, giving MSMEs a major edge in labour-intensive industries such as gems and jewellery, textiles, leather, and footwear. India’s gems and jewellery exports to the UK currently stand at $941 million, including $400 million from jewellery alone. With the UK importing $3 billion worth of jewellery every year, India’s jewellery exports are projected to double within 2–3 years.
Negotiated over three years, the pact also outlines a joint plan to address illegal migration. Addressing concerns that the deal could hurt British workers, UK Business Secretary Jonathan Reynolds clarified that such fears were unfounded and that Indian professionals on temporary assignments would receive the same benefits already available to workers from other countries.
Officials said the FTA guarantees near-total market access for Indian goods, with tariff removal on 99% of product categories, covering almost 100% of trade values.
Alongside the agreement, the two prime ministers are expected to announce an “India-UK Vision 2035” roadmap to deepen ties further amid global shifts.
For Indian consumers, the deal also means lower tariffs on British products such as cars, medical devices, cosmetics, and beverages, with average tariffs dropping sharply from 15% to just 3%.