India clinches free trade deal with UK

India and the UK on Tuesday clinched a free trade agreement (FTA) that will boost Indian exports of textiles, leather and engineering goods and cut levies on British whisky, automobiles and medical devices, and which Prime Minister Narendra Modi said, would catalyse trade, investment and job creation.

- Rezaul H Laskar and Rajeev Jayaswal

The deal between the world's fifth and sixth largest economies was finalised three years after Modi and his former British counterpart Boris Johnson set a target of concluding the FTA by October 2022. Since then, the negotiations were affected by differences on a range of issues, including tariffs on alcohol and automobiles and mobility of Indian professionals, and political turmoil in the UK.

The deal, concluded amid global economic turmoil triggered by US President Donald Trump's tariff regimes, could be a precursor to similar agreements with other nations, including the US. India is currently negotiating FTAs with the EU, the US, Oman, Peru and New Zealand.

The FTA is Britain's most significant trade deal since its exit from the European Union (EU) in 2020.

Modi announced the FTA's finalisation after a phone call with British Prime Minister Keir Starmer, saying in a social media post: "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."

"These landmark agreements will further deepen our Comprehensive Strategic Partnership, and catalyse trade, investment, growth, job creation, and innovation in both our economies. I look forward to welcoming PM Starmer to India soon."

Starmer described the FTA as a "huge economic win" for the UK and thanked Modi "for his decisive leadership in getting the deal over the line", according to a statement from 10, Downing Street. Starmer emphasised the "need to go further and faster to get things done" and both leaders noted the deal is the "biggest the UK has done since leaving the EU, and the most ambitious India has ever done".