India, UK seal free trade and social security pacts after 3.5 years of talks
New Delhi: India and the United Kingdom on Tuesday concluded two major agreements — a comprehensive free trade agreement (FTA) and a social security pact — marking the end of over three years of protracted negotiations.
The milestone deal between the world’s fifth and sixth-largest economies is expected to boost bilateral trade by £25.5 billion ($34 billion) by 2040, with liberalised market access and reduced trade barriers at its core.
“Delighted to speak with my friend PM Keir Starmer. 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,” Prime Minister Narendra Modi posted on X.
Delighted to speak with my friend PM @Keir_Starmer. 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…
— Narendra Modi (@narendramodi) May 6, 2025
He added that the agreements would deepen the strategic partnership and spur trade, investment, jobs, and innovation across both economies.
UK Prime Minister Keir Starmer said: “We are now in a new era for trade and the economy. Today we have agreed a landmark deal with India - one of the fastest growing economies in the world, which will grow the economy and deliver for British people and business."
While the FTA is aimed at slashing tariffs, easing trade norms, and improving market access, the social security agreement — long sought by India — seeks to safeguard the rights of cross-border professionals and skilled workers by eliminating double social security contributions.
A separate bilateral investment treaty (BIT), however, remains unresolved.
Talks on the BIT have stumbled over disagreements regarding dispute resolution frameworks, which remain a sticking point.
The urgency to wrap up the deal reflects the shifting dynamics of global trade, with protectionist moves from the US pushing countries towards bilateral trade frameworks.
Although complete details of the pact are awaited, the announcement comes at a time when India is also pushing forward with talks for a limited trade deal with the United States.
Formal negotiations between India and the UK resumed in February after nearly a year-long pause.
A breakthrough came following Commerce Minister Piyush Goyal’s visit to London last week, where he met UK Business and Trade Secretary Jonathan Reynolds to close out the remaining issues.
In FY25, total trade between the two countries stood at $21.33 billion.
India’s exports to the UK grew 13.3 percent year-on-year to $12.9 billion, while imports fell 6.1 percent to $8.4 billion.
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