New Delhi: India and the United Kingdom have formally concluded a comprehensive and ambitious Free Trade Agreement (FTA), accompanied by a landmark Double Contribution Convention, marking a new era of bilateral economic cooperation.
The announcement was made following a phone conversation between Prime Minister Narendra Modi and his British counterpart Keir Starmer.
Calling the agreements a “historic milestone,” Prime Minister Modi said the twin accords would “catalyze trade, investment, growth, job creation, and innovation in both our economies.”
The pacts are expected to significantly boost India-UK bilateral trade, currently valued at over $50 billion, and further reinforce their Comprehensive Strategic Partnership.
Delighted to speak with my friend PM @Keir_Starmer. In a historic milestone, India and the UK have successfully concluded an ambitious and mutually beneficial Free Trade Agreement, along with a Double Contribution Convention. These landmark agreements will further deepen our…
— Narendra Modi (@narendramodi) May 6, 2025
“This agreement cements the strong foundations of the India-UK Comprehensive Strategic Partnership and paves the way for a new era of collaboration and prosperity,” the Prime Minister’s Office said in a statement.
Key Benefits and Economic Impact
The FTA will reduce tariffs on several key Indian export sectors such as textiles, footwear, carpets, marine products, and automobiles, which currently face UK duties ranging from 4 percent to 16 percent.
The accompanying Double Contribution Convention is also a major win for Indian professionals temporarily working in the UK. It will exempt them from mandatory social security contributions for up to three years potentially saving 20 percent of their income.
More than 60,000 IT professionals are expected to benefit, with estimated cumulative savings for Indian companies and employees exceeding ₹4,000 crore.
The trade deal with India will raise living standards, put more money in the pockets of British working people, and deepen the unique ties between our two nations. pic.twitter.com/TAXsPPN9Pv
— Keir Starmer (@Keir_Starmer) May 6, 2025
The Federation of Indian Chambers of Commerce and Industry (FICCI) welcomed the development, calling it a forward-looking and balanced agreement.
The leaders of both countries expressed confidence that the agreements would open new business avenues, strengthen economic linkages, and deepen people-to-people ties. Prime Minister Modi also conveyed his eagerness to welcome Prime Minister Starmer to India soon to further enhance diplomatic and commercial relations.
