Britain And India Sign Free Trade Pact During Modi Visit

  • Britain and India signed a free trade agreement on Thursday, July 24, 2025, during a visit by Indian Prime Minister Narendra Modi. The agreement represents a deal to cut tariffs on goods from textiles to whisky and cars, and allow more market access for businesses.
  • Talks on the trade pact were concluded in May after three years of stop-start negotiations, with both sides hastening efforts to clinch a deal in the shadow of tariff turmoil unleashed by U.S. President Donald Trump.
  • The agreement between the world's fifth and sixth largest economies aims to increase bilateral trade by a further £25.5Bn (US$34Bn) by 2040. This marks Britain's most significant trade agreement since its departure from the European Union (EU) in 2020. However, its overall impact is likely to be modest compared to the far-reaching effects of severing economic ties with its closest trading partner. Additionally, this agreement represents India's most substantial strategic partnership with an advanced economy, potentially serving as a model for future comprehensive deals with the EU and other global regions.
  • Both sides hailed the trade agreement as a historic deal which will take effect following a ratification process, likely within a year, after which firms such as whisky distiller Diageo, and carmakers including BMW, Nissan, Aston Martin and Tata-owned Jaguar Land Rover could benefit from lower duties.
  • British Prime Minister Keir Starmer noted that there would be huge benefits for both countries, making trade cheaper, quicker and easier in a new global era for trade. Modi called the agreement "a blueprint for our shared prosperity," highlighting how Indian goods from textiles to jewellery and seafood would secure better market access.
  • The countries also agreed on a partnership covering areas such as defence and climate, and aim to strengthen co-operation on tackling crime. The trade deal came about quickly after Britain's new Labour government restarted negotiations in February.

(Source: Reuters)