Modi, Starmer seal landmark India-UK FTA; deal likely to unlock $34 billion in annual trade, eliminates tariffs on 99% Indian exports

The agreement was formalised during PM Modi’s visit to the UK, marking the first leg of his two-nation tour.

After his arrival on Wednesday, the two leaders met in London the next day for a bilateral meeting ahead of the signing ceremony.

The talks were held at the historic Hawtry Room, where Modi and Starmer conducted a one-on-one meeting to finalise what is being described as India’s most wide-ranging trade deal and the UK’s most consequential agreement since Brexit.

"Today marks a historic day in our relations. I am delighted that after the hard work of several years, today our two nations have signed the comprehensive economic and trade agreement," PM Modi said.

He noted that Indian exports such as textiles, footwear, seafood, engineering goods, and gems and jewellery will now enjoy better access to the UK market.

"This agreement will especially benefit Indian youth, farmers, fishermen and the MSME sector. On the other hand, for the people of India and industry, products made in the UK like medical devices will be available at reasonable and affordable prices," he added.

Under the FTA, 99 per cent of Indian exports to the UK—covering nearly the entire trade value—will face zero tariffs.

This includes key sectors such as textiles, leather, footwear, gems, and jewellery, enhancing the competitiveness of Indian goods in the British market.

The pact will also make it easier for British companies to export products like whisky and cars to India, while expanding the overall trade portfolio between the two countries.

As per the UK’s estimates, the FTA is projected to raise bilateral trade by £25.5 billion (USD 34 billion) annually.

It is described as India’s most comprehensive trade agreement to date and the most economically significant one for the UK since Brexit.

Commerce Minister Piyush Goyal highlighted that the deal delivers substantial gains for Indian agriculture, with 95 percent of farm exports enjoying duty-free access.

For fisherfolk, 99 percent of marine exports will now face zero tariffs, which is expected to significantly boost their incomes.

UK Prime Minister Keir Starmer hailed the FTA as the "biggest and most economically significant" trade deal the UK has struck since leaving the European Union.

"It is a deal that will bring huge benefits to both of our countries — boosting wages, raising living standards and putting more money in the pockets of working people. It is good for jobs, it is good for business, cutting tariffs and making trade cheaper, quicker and easier," he said.

Earlier in the day, Starmer had described the India trade pact as a "Plan for Change in action."