Britain and India have signed a long-awaited free trade agreement, concluding three years of intermittent negotiations and marking a significant milestone in both countries’ post-pandemic economic strategies.
The agreement comes amid global trade disruptions sparked by former US President Donald Trump’s tariff policies, which accelerated the urgency for both sides to deepen bilateral ties.
The new pact between the world’s fifth- and sixth-largest economies is projected to increase trade by an additional £25.5 billion ($34 billion) by 2040. It promises liberalised market access, reduced trade restrictions, and substantial tariff cuts on goods such as whisky, cars, advanced manufacturing parts and food products. Quotas have also been agreed for auto imports.
Indian Prime Minister Narendra Modi hailed the pact as “ambitious and mutually beneficial,” while British Prime Minister Keir Starmer described it as a step toward strengthening alliances and reducing trade barriers in this “new era for trade.”
The deal will enable more British firms to compete for public and private sector contracts in India. At the same time, it will facilitate easier movement for Indian workers to Britain for employment purposes—though Britain’s points-based immigration system will remain unchanged.
Crucially, the agreement signals India’s willingness to open traditionally protected sectors of its economy—such as the automobile industry—providing a blueprint for how it may engage with other major Western economies, including the United States and the European Union.
For the UK, the deal is seen as the most significant trade agreement since it formally left the European Union in 2020, reinforcing its global trade agenda and diversifying economic partnerships beyond Europe.
Both nations continue to seek separate agreements with the US to remove trade barriers erected during Trump’s administration, but this UK-India deal highlights a proactive shift toward bilateral economic resilience amidst ongoing global uncertainty.
Ozioma Samuel-Ugwuezi
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