India and UK sign historic Free Trade Agreement

It will boost annual trade by $34 bn

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India and the United Kingdom signed their long-awaited Free Trade Agreement (FTA) in London on Thursday (July 24, 2025), which is considered the UK’s most important trade deal since it exited the European Union in 2020. It will boost bilateral trade by around $34 billion annually.

The deal was formalised in presence of Prime Minister Narendra Modi and his British counterpart Keir Starmer. After the FTA, 99% of Indian exports to the UK will see duties eliminated to zero including for textiles, generic drugs and medical devices, leather goods and agricultural and chemical products, according to documents provided to reporters by Indian officials.

The deal will also make it easier for British firms to export whisky, cars and other products to India besides boosting the overall trade basket. For India, it’s the most significant trade deal the country has ever signed, and shows the South Asian nation’s willingness to lower barriers as it seeks to lure investments.