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India Today

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May 19, 2025

The biggest bilateral trade deal in Trump 2.0, India and the UK hold up a template for a storm-tossed world

- BY ANILESH S. MAHAJAN

Business as usual’ is the happy place where India would have liked things to be. The proximity of a truculent Pakistan does not allow that, not after Pahalgam and certainly not after India’s response. But even amidst war clouds, New Delhi has kept its eyes on the ground—and feet moving. Hours before Operation Sindoor, India also announced a landmark economic step: a free trade agreement (FTA) has been successfully negotiated and signed with the UK, its first big accord in the chaos of the Trump era. For the UK, too, this is the biggest trade pact since exiting the European Union in 2020.

India is the UK’s 12th largest trading partner, with goods and services transactions worth £43 billion (Rs 4.9 lakh crore) in 2024—£8.3 billion (Rs 94,570 crore) in India’s favour. After this FTA, finalised after three years of negotiations spanning 13 rounds and a few diplomatic stand-offs with revolving-door British cabinets, bilateral trade is projected to touch $120 billion by 2030. Heralded as a “win-win” by Prime Minister Narendra Modi and his UK counterpart Keir Starmer, the deal promises to redefine bilateral economic ties but also exposes the limits of trade diplomacy in a deeply political world.

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