New Delhi: The Union Cabinet on Tuesday approved the much-anticipated Free Trade Agreement (FTA) between India and the United Kingdom, which is set to be signed in London on July 24, sources said. The signing will take place during Prime Minister Narendra Modi’s official visit to the UK.
Prime Minister Modi’s four-day trip to the United Kingdom and the Maldives commences on Wednesday. Commerce and Industry Minister Piyush Goyal will accompany the Prime Minister on this visit.
Key Highlights of the India-UK FTA
The India-UK trade pact, officially termed the Comprehensive Economic and Trade Agreement, aims to boost bilateral trade by removing tariffs on labour-intensive Indian exports such as leather, footwear, and clothing. In return, it will reduce import duties on British products like whisky and automobiles, making them more affordable in India.
The agreement includes multiple chapters covering trade in goods and services, innovation, government procurement, and intellectual property rights. The trade deal targets doubling the bilateral trade volume to USD 120 billion by 2030.
Social Security Pact and Pending Investment Talks
Alongside the FTA, both countries have concluded negotiations on the Double Contribution Convention Agreement, a social security pact designed to avoid double social security contributions by Indian professionals working temporarily in the UK.
However, talks on the Bilateral Investment Treaty (BIT) are still underway.
Next Steps for the Agreement
Once signed, the agreement will require approval from the British Parliament before it can be implemented. The FTA will come into force after ratification by both India and the UK.
Growing India-UK Trade Relations
Bilateral trade between India and the UK has steadily increased, reaching USD 21.34 billion in 2023-24, up from USD 20.36 billion in 2022-23. India’s exports to the UK rose 12.6 percent to USD 14.5 billion in 2024-25, while imports from the UK grew by 2.3 percent to USD 8.6 billion during the same period.
The new trade agreement is expected to further accelerate trade, enhance economic cooperation, and strengthen strategic ties between the two nations.
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