New Delhi/London – May 6, 2025: In a major diplomatic and economic milestone, India and the United Kingdom have successfully concluded a long-awaited Free Trade Agreement (FTA) and a Double Contribution Convention, marking a new chapter in their Comprehensive Strategic Partnership.
The announcement came after a high-level discussion between Indian Prime Minister Narendra Modi and his British counterpart, Keir Starmer. Both leaders took to social media platform X (formerly Twitter) to celebrate the momentous achievement.
“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,” said Prime Minister Modi. He emphasized that these landmark agreements will catalyze bilateral trade, investment, job creation, and innovation, strengthening ties between the two democracies.
Hinting at continued high-level engagement, Modi added, “I look forward to welcoming PM Starmer to India soon.”
Prime Minister Starmer echoed similar sentiments, describing the agreement as a “historic moment” for the UK. “Today Britain has agreed a landmark trade deal with India. Fantastic news for British business, British workers, and British shoppers, delivering on our Plan for Change,” he posted.
A New Trade Framework Covering Goods and Services
The FTA, described by both governments as well-balanced and comprehensive, is expected to significantly boost bilateral trade by reducing tariffs and easing regulations. The deal encompasses both goods and services, laying the groundwork for increased cooperation in key economic sectors.
India is poised to gain enhanced market access for its skilled professionals, especially in the UK’s IT and healthcare industries. Additionally, Indian exports such as textiles, footwear, carpets, marine products, grapes, and mangoes are set to benefit from reduced tariffs.
According to the Global Trade Research Initiative (GTRI), these sectors stand to make strong inroads in the UK market due to Britain’s relatively low import duties on these items.
What the UK Gains
For its part, the UK has negotiated reduced tariffs on major export items including Scotch whisky, electric vehicles, lamb meat, chocolates, and confectionery. The British government also aims to expand its presence in India’s robust service sector — particularly in telecommunications, legal services, financial services, banking, and insurance.
British officials believe that the FTA will provide a fresh impetus to UK exports and create new market opportunities at a time when the country is actively pursuing post-Brexit global trade deals.
Double Contribution Convention: A Boon for Professionals
Alongside the FTA, the Double Contribution Convention addresses a long-standing issue faced by professionals and expatriates working across both countries. The agreement is expected to streamline social security contributions and ensure that individuals are not double taxed or required to pay into two different social security systems.
This move is anticipated to benefit thousands of Indian and British professionals and foster greater mobility between the two nations.
Strengthening a Strategic Bond
This FTA stands as a cornerstone in the evolving India-UK Comprehensive Strategic Partnership, which was officially elevated in May 2021. Over the last few years, the two countries have increasingly aligned on issues ranging from climate change and digital innovation to education, defense, and regional security.
Economists and trade analysts view the agreement as a rare diplomatic win that balances political intent with economic practicality. The timing is particularly crucial as both nations look to reenergize their economies in the post-pandemic and post-Brexit landscape.
As the details of the deal are made public in the coming days, businesses across both countries are eagerly preparing to tap into the expanded trade corridors and new regulatory frameworks.
The agreement, hailed as a model for future partnerships, could potentially serve as a template for similar negotiations India is pursuing with other developed economies.
