LONDON, U.K.: In a significant step forward for post-Brexit Britain and rising global power India, Prime Ministers Keir Starmer and Narendra Modi on July 24 concluded a long-awaited free trade agreement that will dramatically reduce tariffs on key goods and deepen economic and strategic cooperation between the two countries.
The signing took place at Chequers, the British Prime Minister’s official country residence, where trade ministers Jonathan Reynolds of the U.K. and Piyush Goyal of India formalized the pact. The deal, years in the making, was hailed as a turning point in bilateral relations and a symbol of renewed ambition on both sides.
Starmer described it as “the most substantial and economically transformative trade agreement” the United Kingdom has entered into since its departure from the European Union in 2020. Modi, echoing the sentiment, called it “a historic day” in India–U.K. relations.
Alongside the trade pact, the two nations unveiled nearly six billion pounds (US$8 billion) in new commercial and investment commitments across strategic sectors such as artificial intelligence, aerospace, dairy, and clean energy. Both leaders pledged closer collaboration in defense, climate action, healthcare, and migration policy.
The deal, which still requires ratification by the British Parliament, has been in negotiation since early 2022. Talks were launched initially under then-Prime Minister Boris Johnson, who ambitiously promised a conclusion by the Diwali festival that year. However, negotiations saw multiple delays under the former Conservative government, only gaining new momentum after the 2024 elections, which saw Modi win re-election and Labour come to power under Starmer.
Under the agreement, India’s average tariff on British exports will drop sharply from 15 percent to three percent. Notably, tariffs on Scotch whisky and English gin — long a sticking point — will be cut in half from 150 percent to 75 percent, and gradually reduced to 40 percent over a decade. Automotive tariffs, which currently exceed 100 percent, will fall to 10 percent under a tariff-rate quota system.
The U.K. projects that the deal will boost bilateral trade by 25.5 billion pounds ($35 billion) annually by 2040 and inject nearly five billion pounds ($6.8 billion) a year into the British economy. Meanwhile, India’s Trade Ministry has stated that 99 percent of Indian exports, including textiles, leather goods, and food items, will be granted duty-free access to the U.K. market.
Beyond the numbers, the agreement underscores a renewed political and cultural closeness. Nearly two million people of Indian origin live in the U.K., a legacy of deep historical ties dating back to the colonial era, which ended in 1947.
Starmer emphasized that shared heritage and people-to-people connections provide a strong foundation for a modern partnership. “The U.K. and India have unique bonds of history, of family and of culture,” he said. “This deal marks the beginning of a new chapter — ambitious, modern, and built for the future.”
With a nod to the cricket rivalry currently playing out between the two nations, Modi added a lighthearted metaphor: “Cricket is a great symbol of our partnership. There may be a swing and a miss at times, but we always play with a straight bat. Together, we are building a high-scoring, enduring alliance.”
The agreement is seen not just as a bilateral milestone, but as a signal of Britain’s growing pivot toward the Indo-Pacific and India’s emergence as a central player in global trade diplomacy.