Historic India-UK Free Trade Agreement Gets Cabinet Nod, PM Modi to Sign Deal in London on July 24
New Delhi/London, July 23, 2025: In a major step toward enhancing economic ties, the Government of India has approved the India-UK Free Trade Agreement (FTA). The deal, officially titled the Comprehensive Economic and Trade Agreement (CETA), will be formally signed by Prime Minister Narendra Modi in London on July 24 during his four-day diplomatic tour.
PM Modi will first visit the UK and later proceed to the Maldives. He will be accompanied by Commerce and Industry Minister Piyush Goyal, who played a key role in finalizing the terms of the agreement.
Target: $120 Billion in Trade by 2030
The CETA aims to double the bilateral trade volume between India and the United Kingdom to $120 billion by 2030. The deal includes a wide array of sectors ranging from goods, services, innovation, intellectual property rights, to public procurement.
What Will Get Cheaper? Who Gains the Most?
Under the FTA:
Indian exports such as leather goods, footwear, and textiles—which are labor-intensive will benefit from reduced or zero import tariffs in the UK.
In return, Indian import duties on UK-made products like whisky and automobiles will be significantly reduced.
This balanced arrangement is designed to promote fair trade and economic complementarity between both nations.
Social Security Agreement Finalized
The two countries have also finalized a Social Security Agreement (Double Contribution Convention), which will exempt Indian professionals working temporarily in the UK from contributing twice to social security systems. This is a long-standing demand that will now ease the financial burden on Indian employees.
However, discussions are still ongoing regarding a Bilateral Investment Treaty (BIT) to safeguard and encourage mutual investments.
Bilateral Trade Overview
In FY 2024–25:
Indian exports to the UK increased by 12.6%, reaching $14.5 billion.
Imports from the UK rose by 2.3%, totaling $8.6 billion.
The total bilateral trade during 2023–24 stood at $21.34 billion, a rise from $20.36 billion in 2022–23.
When Will the FTA Be Implemented?
Once the agreement is signed and ratified by both parliaments, it will officially come into force. This will result in the elimination or significant reduction of customs duties on most traded goods, giving a strong boost to bilateral trade, job creation, and investment flows.
