The Free Trade Agreement (FTA) between India and the United Kingdom was signed on 24 July 2025 and concluded successful negotiations that began in January 2022.
What Is the India-UK Free Trade Deal?
India-UK Free Trade Deal is intended to eradicate or diminish import-export tariffs between the countries:
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Indian goods will be exported to the UK at zero tariff in 99 percent of cases.
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The average tariff level on the imports of 99% of the UK goods to India will be only 3%.
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This deal will boost Indian exports and bring down the cost of imported goods in the UK for Indian customers.
What Will Get Cheaper in India?
- The import tax on UK whisky and gin will also be reduced from 75 per cent down the line to 150 per cent in 10 years
- The lower rate at which the UK food and drink products will be imported will include salmon, lamb, chocolates, biscuits, and soft drinks.
- The prices of cosmetics, medical equipment, and aerospace parts manufactured in the UK will be reduced as import duties are lowered.
What Gets Cheaper in India?
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Whisky & Gin: Import duty of 150 percent reduced to 40 percent in a decade.
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Luxury Cars: Jaguar and Rolls-Royce will be 20-30 percent cheaper.
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UK Food & Beverages: Chocolates, biscuits, and salmon will become affordable.
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Cosmetics, Medical Devices, Fashion & Electronics: Tariffs cut to 3 percent.
Indian Sectors to Benefit
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Textiles: Duty-free exports to the UK; growth to be realized in Surat and Ludhiana.
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Jewellery & Leather: MSMEs and exports to be given a big push.
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Tea, Seafood, Spices: Stimulus to the southern and eastern states.
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Chemicals & Green Energy: Additional exports and joint ventures.
Economic Impact
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More employment, particularly in the textiles and leather sector.
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MSMEs need to have access to new markets.
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Investment in the UK to increase IT, financial services, and green technology.
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The anticipated annual growth in trade is 15 percent.
Implementation
The agreement and deal signed on 24 July 2025 will take effect approximately one year after the UK Parliament approves it.
