India and UK Sign £36.5 billion Trade Deal to Double Commerce by 2030

• India and the UK signed the Comprehensive Free Trade Agreement (FTA) on August 24, 2025.
• The deal aims to increase trade by an estimated £36.5 billion annually by 2035 and double bilateral trade by 2030.

On August 24, 2025, GOV.UK reported that India and the United Kingdom signed a landmark Comprehensive Free Trade Agreement (FTA), in London. The deal was signed by India’s Commerce and Industry Minister, Piyush Goyal, and UK Secretary of State for Business and Trade, Kemi Badenoch, while Indian Prime Minister Narendra Modi and UK Prime Minister Keir Starmer witnessed the ceremony. The event marked the culmination of over three years of negotiations.

The deal is projected to boost bilateral trade by an estimated £36.5 billion annually by 2035, with the two nations aiming to double their overall trade volume to nearly £100 billion by 2030. The agreement reduces tariffs on a wide array of goods and promotes services and investment flows.

As part of the agreement, India secured duty-free access for 98% of its exports to the UK, with labor-intensive sectors such as textiles, footwear, leather, and marine products expected to see substantial benefits. The agreement abolishes current tariffs on these industries, which range from 4–16%. However, to safeguard its agricultural sector, India excluded sensitive items like dairy and rice from tariff reductions.

In return, the UK achieved tariff reductions on 95% of its exports to India, with 90% of these exports set to become entirely tariff-free over the next decade. Duties on British automobile exports, which currently exceed 100%, will drop to 10% under a quota system. Similarly, Scotch whisky tariffs will drop from 150% to 100% immediately and then decrease in phases to 50% over ten years.

In addition, key provisions aim to ease mobility for Indian professionals in fields such as IT, business consulting, yoga instruction, and culinary arts. A significant highlight is the Double Contribution Exemption, which exempts Indian professionals on temporary assignments in the UK from social security contributions for up to three years, potentially boosting their take-home pay.

According to GOV.UK, the agreement is projected to increase UK exports to India by over 50% by 2035 and will also grant British firms access to bid on non-sensitive Indian government contracts, unlocking thousands of new opportunities. Business leaders have widely praised the deal for its promise of expanded market access and sustainable economic growth.

Negotiations for the agreement commenced in January 2022 but faced delays due to differences over tariffs and immigration policies. UK Secretary of State Kemi Badenoch played a pivotal role in resolving outstanding issues, securing the deal just over two years after assuming her role as Secretary of State for Business and Trade. Both parliaments must now ratify the agreement, with officials anticipating full implementation by early 2026.