Today, in a major diplomatic and economic development, Prime Minister Narendra Modi arrived in the United Kingdom to sign a long-awaited Free Trade Agreement (FTA) between India and the UK. The FTA, which was reached after over three years of negotiations and is being talked up as a significant milestone in India\’s global trading ambitions, is also likely to affect discussions that India is hoping to have in the near future on trade with the US.
A Historic Achievement in Bilateral Trade
Under this historic deal, the UK has extended zero-duty access to 99% of Indian exports to the UK, where India will also, over time, reduce or eliminate its tariffs on Scotch whisky, UK autos, textiles and garments, leather, gems, and agri-products. For example, India\’s current 150% tariff on Scotch will phase down to 75% immediately and subsequently down to 40% over 10 years. Tariffs on premium UK autos are also reduced over time and within a controlled quota.
Better Accessibility for Indian Professionals
For professionals, the deal has a provision to waive UK social security for Indian workers posted for a period of up to three years. Visa access for Indian students, tech professionals, and Indian business visitors was also expanded considerably, representing a clear win on the services side for India.
Britain’s Post-Brexit Triumph
British Prime Minister Keir Starmer called the agreement “the most ambitious trade deal Britain has signed post-Brexit,” and estimates suggest it could boost the UK’s GDP by £4.8 billion annually by 2040. This marks a major post-EU trade milestone for the UK, opening new commercial corridors with one of the world’s fastest-growing economies.
Why the India–UK Free Trade Agreement Marks a New Era
The deal opens up duty-free access for 99% of Indian exports and strengthens India\’s trade ties with a post-Brexit UK.
How This Agreement Could Reshape India–US Tariff Negotiations
India\’s strategic diplomacy with the UK may shift the balance in its ongoing trade discussions with the United States.
Can This Deal Influence India–US Tariff Talks?
Nonetheless, this deal will have ramifications beyond the bilateral trade issues.
Many believe that India now has greater leverage with the United States over tariff discussions that have occurred continuously. The United Kingdom trade deal was a bright spot in the current US trade strategy of our trading partners. The United Kingdom agreement had been done in a slower and trust-based etiquette, like the old way—the new way favours speed and statecraft. Perhaps it would serve to do a divergent model with the other Western economies.
A Global Message of India’s Trade Diplomacy
India\’s approach has been tough but also flexible enough for Washington to adopt a more collaborative tone in tariff negotiations with New Delhi. With geopolitical stakes high and uncertainty in the global economy, this deal can perhaps send a quiet message to the US that there are high-value partnerships to be had and that India won\’t bend to pressure.
As India\’s global trade footprint grows, we may just look back on today\’s UK deal as a landmark deal not only in terms of bilateral relations but in shifting how India negotiates on the global stage.
