India UK Free Trade Deal Signed in 2025

PM Modi’s Historic UK Visit: India-UK Free Trade Agreement Signed, Meets King Charles, Heads to Maldives

London, July 24, 2025 — Prime Minister Narendra Modi concluded his high-level visit to the United Kingdom with two significant milestones: the signing of the India–UK Free Trade Agreement (FTA) and a ceremonial meeting with King Charles III. This visit, which marks Modi’s fourth official tour to the UK since taking office, strengthens both economic and diplomatic relations between the two nations.

The landmark India-UK FTA, finalized after over three years of negotiations, is being hailed as Britain’s biggest trade deal since Brexit, promising to redefine bilateral trade for decades. The day concluded with a warm royal engagement at Sandringham House, where PM Modi presented a symbolic tree sapling under his “Ek Ped Maa Ke Naam” campaign.

Key Highlights:

India-UK Free Trade Agreement signed on July 24, 2025
£25.5 billion (USD 34 billion) expected boost in bilateral trade
Tariff cuts on whisky, cars, textiles, leather, and more
Mobility provisions for Indian professionals in UK
PM Modi meets King Charles III in a symbolic royal gesture
PM Modi departs for the Maldives to continue diplomatic tour

A Game-Changing Free Trade Agreement

Signed at Chequers, the official country residence of UK Prime Minister Keir Starmer, the India–UK FTA represents a major leap in the global trade landscape. The agreement was signed by Commerce Minister Piyush Goyal on behalf of India and UK Business Secretary Jonathan Reynolds.

The deal targets a £25.5 billion (USD 34 billion) increase in annual bilateral trade by 2040 and is projected to add £4.8 billion annually to the UK economy. For India, this agreement provides duty-free access for 99% of Indian exports, especially in critical sectors like textiles, apparel, gems & jewellery, leather, marine products, and food.

British exports such as whisky, premium cars, and industrial goods will see significant tariff reductions. For instance:

Tariffs on spirits like whisky will drop from 150% to 75%, further decreasing to 40% over 10 years.
Auto duties will be slashed from 15% to 3%, boosting UK’s luxury car segment in India.

Strategic Business Gains for Both Nations

The FTA is not just about numbers—it’s about job creation, investment, and mobility. The UK government estimates that this trade pact will:

Support over 2,200 British jobs
Attract £6 billion in new investment
Open doors for collaboration in AI, aerospace, dairy, fintech, and more

For Indian exporters, this is a golden opportunity. Textile hubs like Tiruppur, Surat, and Ludhiana; leather clusters in Agra and Kanpur; and jewellery makers across Gujarat and Maharashtra are expected to benefit immensely.

Additionally, the FTA includes mobility provisions easing short-term visa access for Indian professionals in sectors like IT, law, finance, and consultancy. A notable clause also allows Indian professionals posted in the UK to be exempt from paying national insurance, sparking both praise and political debate in the UK.

PM Modi Meets King Charles III: Diplomacy Meets Environmental Values

In a powerful symbol of friendship and shared values, PM Modi met King Charles III at Sandringham House on the same day. As part of his global environmental movement “Ek Ped Maa Ke Naam”, he presented the King with a Davidia involucrata ‘Sonoma’ tree sapling, which will be planted in autumn on royal grounds.

The gesture signifies India’s commitment to sustainable diplomacy and cultural respect. The campaign encourages children to plant a tree in honor of their mothers—a fusion of Indian tradition and global ecological responsibility.

The Road Ahead: Ratification and Bilateral Investment Treaty

While the agreement has been signed, it is yet to be ratified by the UK Parliament and India’s legislative bodies—a process expected to take a few months.

Two key issues remain under negotiation:

Bilateral Investment Treaty (BIT) – to ensure protection for businesses from both nations.
Carbon Border Adjustment Mechanism (CBAM) – a proposed UK climate tax that India has flagged as a potential concern, especially for steel, aluminium, and fertilizer exporters.

Once these are addressed, the FTA is expected to go into effect by early 2026, unlocking a new era of India-UK strategic partnership.

Modi’s Next Stop: The Maldives

With the UK leg of his diplomatic tour complete, PM Modi departed for the Maldives—a strategic ally in the Indian Ocean region. The second phase of this visit aims to deepen India’s regional ties, focusing on climate action, defense cooperation, and maritime security.

This back-to-back diplomacy underscores India’s growing global footprint, as Modi continues to push for stronger alliances, sustainable trade, and climate leadership.

Conclusion

PM Narendra Modi’s visit to the UK in July 2025 was not just a diplomatic trip—it was a historic moment for both nations. With the Free Trade Agreement signed, business ties deepened, and a heartfelt royal engagement, this visit has laid the foundation for a stronger, more sustainable, and mutually beneficial partnership between India and the United Kingdom.

As India eyes global leadership in both trade and diplomacy, this landmark visit stands as a testament to its vision of “Vasudhaiva Kutumbakam”—the world is one family.