Key Highlights:
- India’s first major trade pact with a developed country in over 10 years.
-Covers tariff cuts, services, and public procurement.
- Expected to come into force within a year.
Mumbai: On July 24, 2025, India and the United Kingdom signed a landmark Free Trade Agreement (FTA) in London during Prime Minister Narendra Modi’s official visit. This deal marks India’s first major bilateral trade agreement with a developed nation in over a decade. The agreement is expected to take effect within a year, after both countries complete necessary legal steps.
This historic deal wraps up three years of tough negotiations and is set to open doors for businesses on both sides. It focuses on cutting tariffs, improving market access for goods and services, and includes new rules on investment and government contracts.
What Is a Free Trade Agreement (FTA)?
A Free Trade Agreement is a deal between two or more countries to make trading goods and services easier and cheaper. It usually includes reducing or removing taxes (tariffs) on imports, protecting intellectual property, and allowing companies to invest or do business in each other's countries more freely.
For example, without an FTA, India may charge high tariffs on British goods. But with this FTA, many of those tariffs will be reduced or removed, making British products cheaper in India — and vice versa.
Benefits of an FTA
An FTA helps businesses in many ways:
Tariff Reductions: Products from the partner country may face lower or no import taxes, making them more competitive.
Investor Protections: Investors from one country will get the same fair treatment as local or third-country investors.
Better Market Access: Service providers (like IT or finance companies) can now offer services in the partner country more easily.
Government Contracts: Companies can now bid on government tenders in the other country, which was harder before.
Stronger IP Rights: Intellectual property like brands, patents, and inventions will be better protected.
Why This Deal Matters
This India-UK FTA is a big step forward for both countries. It will help small and large businesses export and invest more smoothly, create jobs, and deepen economic ties. It's also a signal that both nations are open to free and fair trade in a global economy.
