India and the United Kingdom have concluded a comprehensive Free Trade Agreement (FTA) and a Double Contribution Convention, following three years of negotiations, according to official statements released on May 7.
British Prime Minister Keith Starmer hailed the deal as a “landmark” agreement with one of the world’s fastest-growing economies, stating it would boost the UK economy and benefit British businesses and consumers. Indian Prime Minister Narendra Modi called it a “historic milestone” that reflects the strength of bilateral relations and shared economic ambitions.
The UK government projects the agreement will boost bilateral trade by £25.5 billion ($34 billion). In 2024, trade between the two countries reached £42.6 billion, an 8.3% increase from the previous year. However, the UK ended the year with a trade deficit of £8.4 billion with India, which is now its 11th-largest trading partner.
Under the deal, the UK will eliminate tariffs on 99.1% of imports from India immediately upon the agreement’s implementation. India will reduce tariffs on 90% of UK goods, with 85% of those moving to zero tariff within ten years.
As part of the Double Contribution Convention, Indian employees temporarily working in the UK will be exempt from paying national insurance contributions for up to three years. This provision is also expected to ease financial obligations for Indian companies operating in the UK.
India anticipates the agreement will help double bilateral trade to approximately $120 billion by 2030.
