PM Modi, UK’s Starmer Announce Landmark Trade Pact With Focus On Investment, Job Creation

SOURCE : NEW18 NEWS

Last Updated:May 06, 2025, 19:23 IST

Bilateral trade between India and the UK increased to $21.34 billion in 2023-24 from $20.36 billion in 2022-23. The average duty on goods imported from India into the UK is 4.2%

The Prime Ministers of India and the United Kingdom announced on Tuesday that both nations have completed a free trade agreement. Prime Minister Narendra Modi in a social media post welcomed the successful conclusion of the India–UK Free Trade Agreement along with the Double Contribution Convention.

“Prime Minister Shri Narendra Modi and Prime Minister of the United Kingdom H.E. Sir Keir Starmer had a telephone conversation today. The two leaders welcomed the successful conclusion of an ambitious and mutually beneficial India–UK Free Trade Agreement along with the Double Contribution Convention,” a statement released by the government said.

The UK Prime Minister, Keir Starmer, reacted to the signing of the trademark deal by saying that “strengthening alliances and reducing trade barriers with economies around the world is part of their Plan for Change to deliver a stronger and more secure economy”.

As per Narendra Modi’s post on social media, both Prime Ministers also spoke over the telephone. “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 Comprehensive Strategic Partnership, and catalyse trade, investment, growth, job creation, and innovation in both our economies,” PM Modi said in a social media post on X.

He also invited his English counterpart to India for a visit. “I look forward to welcoming PM Starmer to India soon,” he said.

Starmer’s office in a social media post said: “The UK and India have agreed a landmark free trade deal to make working people and businesses better off in both our countries. Delivering on our Plan for Change to grow the economy, raise living standards, and put money back in people’s pockets”.

Bilateral trade between India and the United Kingdom rose to USD 21.34 billion in 2023-24, up from USD 20.36 billion the previous year. Currently, goods imported from India into the UK attract an average tariff of 4.2 per cent.

According to economic think tank GTRI, the new trade pact is expected to benefit several Indian exports, including textiles, garments such as shirts, trousers, and dresses, as well as bed linen, footwear, carpets, automobiles, marine products, grapes, and mangoes, all of which currently face low to moderate import duties in the UK market.

In FTAs, two countries either eliminate or significantly reduce customs duties on maximum goods traded between them. They also ease norms for promoting trade in services and bilateral investments.

The Indian industry was demanding greater access for its skilled professionals from sectors like IT and healthcare in the UK market, besides market access for several goods at nil customs duty.

On the other hand, the UK was seeking a significant cut in import duties on goods such as scotch whiskey, electric vehicles, lamb meat, chocolates and certain confectionary items.

Britain is also looking for more opportunities for UK services in Indian markets in segments like telecommunications, legal and financial services, including banking and insurance.

There are 26 chapters in the agreement, which includes goods, services, investments and intellectual property rights.

Location :

New Delhi/London

First Published:

May 06, 2025, 18:28 IST