India and the United Kingdom will sign a free trade agreement (FTA) on Thursday during Prime Minister Narendra Modi’s visit to Britain. Under the deal, New Delhi will ease tariffs on British whisky, cars and selected food items, while the UK will offer duty-free access to Indian textiles and electric vehicles.
The agreement, finalised in May after three years of on-and-off negotiations, is expected to boost bilateral trade by eliminating numerous barriers and expanding market access for both sides. It will come into force once it is ratified by the British Parliament and India’s federal cabinet—likely within a year.
“This is a significant agreement,” India’s Foreign Secretary Vikram Misri told reporters on Tuesday, adding that legal vetting was nearly complete ahead of Modi’s four-day trip to the UK and Maldives.
Trade Minister Piyush Goyal will accompany Modi for the formal signing, a commerce ministry official said.
This will be Modi’s fourth visit to the UK since taking office in 2014. He is scheduled to meet Prime Minister Keir Starmer to discuss issues spanning trade, energy, security, health and education, and will also engage with business leaders.
Bilateral trade between the two countries reached $55 billion in 2023–24, while the UK has emerged as India’s sixth-largest investor, with cumulative investments of nearly $36 billion, Misri said.
Around 1,000 Indian companies currently operate in the UK, employing over 1,00,000 people and accounting for approximately $20 billion in investments.
Under the FTA, India will immediately reduce tariffs on Scotch whisky from 150% to 75%, with further cuts to 40% over the next decade, according to the British government. Import duties on British cars will fall from 100% to 10% under a quota system that will be gradually liberalised.
In return, Indian manufacturers are expected to gain access to the UK market for electric and hybrid vehicles, also under a quota-based framework, commerce ministry officials said.
The ministry added that 99% of Indian exports to Britain, including textiles, would benefit from zero tariffs, while Britain will see tariff reductions on 90% of its product lines.
“The UK is an important market for Indian exporters,” said Ajay Sahai, director general of the Federation of Indian Export Organisations. “The trade pact will boost bilateral trade and open opportunities for Indian sectors such as textiles, footwear, marine and engineering goods.”
