UK, India seal historic free trade deal after three years of talks

Indian Prime Minister Narendra Modi and UK Prime Minister Sir Keir Starmer have signed a major free trade agreement, promising a multi-billion-pound boost in exports and marking the most significant UK trade deal since Brexit.

The agreement will reduce tariffs on UK goods such as whisky, gin, cars, aerospace parts, medical devices, and luxury food products, while making Indian exports like textiles, jewellery, footwear, and seafood cheaper in the UK, Caliber.Az cites a report from UK media.

Average tariffs on British exports to India will drop from 15% to 3%, with whisky tariffs halved from 150% to 75% and falling further to 40% by 2035.

"This deal is now signed, sealed, delivered," Starmer said at the signing at Chequers. "It’s the biggest and most economically significant deal Britain has made since Brexit." He added that it would create over 2,200 UK jobs and deepen ties with India, a country with “unique bonds of history, of family and of culture.”

Modi called the deal “a blueprint for our shared prosperity,” highlighting increased Indian access to UK-made goods and enhanced cooperation on defence, education, technology, and climate.

The pact also includes a new plan to combat illegal migration, enhanced intelligence sharing, and a forthcoming agreement on criminal record exchanges to support courts and travel bans.

Although critics warned the deal could undercut British workers due to extended social security exemptions, UK Business Secretary Jonathan Reynolds dismissed this, noting such agreements already exist with 17 other countries. He added, “There is no tax advantage for hiring an Indian worker over a British worker.”

The agreement is expected to add £4.8 billion annually to the UK economy. It still requires UK parliamentary approval and will take at least a year to come into force. Talks continue on deeper financial services access and a bilateral investment treaty.

This is Modi’s fourth visit to the UK since 2014 and follows the UK-India Technology Security Initiative signed last year.

By Tamilla Hasanova