Britain and India formally signed a free trade agreement on Thursday during Indian Prime Minister Narendra Modi’s visit to London, marking a significant milestone in their economic partnership. The deal, finalized after three years of intermittent negotiations, promises to lower tariffs on a wide range of goods—including textiles, whisky, and cars—while enhancing market access for businesses from both countries.
This agreement represents Britain’s largest trade deal since its departure from the European Union in 2020, though experts note its economic impact will be smaller compared to the extensive trade that once existed between the UK and the EU. For India, the deal marks its most significant strategic trade partnership with a major advanced economy and is expected to strengthen bilateral ties.
Negotiations accelerated in recent months against a backdrop of global trade uncertainties, including disruptions caused by tariff policies under the Trump administration in the United States. Both Britain and India are keen to expand their economic cooperation and reduce barriers to trade, thereby fostering increased investment and business opportunities.
The pact aims to boost bilateral trade by an estimated £25.5 billion (approximately $34 billion) by 2040. It encompasses a variety of sectors, ensuring smoother and more competitive trade flows. For example, Indian exporters are expected to benefit from reduced tariffs on textiles and clothing, while British whisky producers and automobile manufacturers will gain better access to the growing Indian market.
Beyond economics, the agreement signals a deepening strategic relationship between Britain and India, two democracies with shared historical ties and a commitment to enhancing cooperation in multiple domains, including technology, climate change, and security.
Furthermore, the deal is viewed as a potential model for future agreements between India and other major economies, such as the European Union, which has been in talks with India over a similar trade arrangement for years.
As global trade patterns continue to shift, this free trade agreement reinforces Britain and India’s commitment to closer collaboration and economic growth, positioning both nations for stronger roles in the international trade landscape over the coming decades.
