Britain and India finalized a free trade agreement on Thursday during Indian Prime Minister Narendra Modi’s visit, marking a significant step in economic relations between the two nations. The deal will reduce tariffs on a range of goods, including textiles, whisky, and automobiles, while also granting businesses greater market access. Negotiations, which spanned three years with intermittent delays, concluded in May as both countries sought to counterbalance the global trade disruptions caused by former U.S. President Donald Trump’s tariff policies.
The agreement between the world’s fifth and sixth-largest economies is expected to boost bilateral trade by an additional £25.5 billion ($34 billion) by 2040. For Britain, it represents the most substantial trade deal since its departure from the European Union in 2020, though its economic impact will be far smaller than that of Brexit. For India, the pact marks its most significant strategic partnership with an advanced economy, potentially serving as a model for future agreements with the EU and other regions. The deal will come into force following a ratification process, likely within the next year.
British Prime Minister Keir Starmer hailed the agreement as a major milestone, stating it would deliver “huge benefits” by making trade between the two nations cheaper, faster, and more efficient. “We’ve entered a new global era, and that is one that requires us to step up, not to stand aside… by building deeper partnerships and alliances,” Starmer emphasized. Modi echoed the sentiment, expressing confidence that the visit would significantly advance economic collaboration between India and Britain.
Beyond trade, the two leaders also agreed on a broader partnership covering defense, climate action, and crime prevention. The agreements signal a deepening of ties between the two nations, with both sides committing to enhanced cooperation on shared challenges. The deal underscores Britain’s post-Brexit strategy of forging stronger global trade links while providing India with a key foothold in Western markets.