India – UK Free Trade Agreement
Confederation of Indian Industry would like to congratulate the UK and India on the signing of this historical agreement. The India–UK Free Trade Agreement is a landmark development that reflects the deepening of a long-standing and historic partnership between two dynamic economies.
“We welcome and compliment the Government of India for inking the historic India-UK FTA under the visionary leadership of Prime Minister Modi. The agreement is a transformative step, driven by a shared commitment to deepen economic ties through enhanced cooperation in technology, diversification of global supply chains and a more business – friendly environment. The timely agreement will further help in advancing the UK-India relations guided by the 2030 Roadmap, aimed at building a comprehensive strategic partnership and deepening bilateral trade to reach USD 100 billion by 2030” said Mr Sanjiv Puri, President, CII. “It marks a significant milestone in the strategic partnership between the two nations. The agreement will enable India and UK to jointly harness economic synergies, promote innovation, and create transformative economic opportunities.”
The India-UK FTA has unlocked benefits across a range of sectors, particularly labour-intensive industries like textiles, marine products, leather, footwear, sports goods, toys, and gems and jewellery. Key sectors such as engineering goods, auto components, and organic chemicals also stand to gain. The agreement delivers a substantial boost to services trade, including IT/ITeS, financial and professional services, business consulting, and education. It fosters deeper strategic alignment and enhances global mobility—especially for young Indian professionals, who now enjoy a three-year exemption from UK social security contributions.
As the world’s fastest-growing major economy, India is on track to become a $5 trillion economy by 2027, supported by strong macroeconomic fundamentals, bold reforms, and robust infrastructure and technology investments. The UK, with its globally integrated economy, innovation ecosystem, and export capabilities, remains a vital trade partner. This FTA enables businesses on both sides to harness complementary strengths and accelerate shared economic growth.
The bilateral trade between India and the UK increased to USD 21.34 billion in 2023-24 from USD 20.36 billion in 2022-23. Britain is the sixth-largest investor in India. The country has received USD 35.3 billion FDI during April 2000 and September 2024. The FTA is further expected to increase investment of UK Businesses in India and vice versa. The agreement will indirectly create hundreds and thousands of jobs across both countries in key sectors. As per media agencies, UK enterprises currently support over 6,00,000 jobs in India, and this figure is anticipated to rise with increased bilateral investments facilitated by the FTA. On the others side, Indian companies have generated employment and new jobs in the UK over the past three years. This FTA will be expected to further bolster the trend by encouraging more Indian investments. In 2024, there were 971 Indian Owned companies operating in the UK employing nearly 118,430 people and this is expected to increase further once the agreement comes into full force. This agreement would level up businesses throughout the UK, benefiting MSMEs as well as large-scale UK exporters.
The agreement will lead to enhanced cooperation in emerging areas such as advanced technologies, defence, health, climate change, clean & renewable energy, and the financial sector. India's strengths in software development, artificial intelligence, and digital innovation, as showcased by successful several startups offer valuable lessons for the UK's tech innovation experience. The agreement will explore research & development, education & skilling for deeper collaboration. Further, potential joint research programs in life sciences and deep tech can also be enhanced.
6 May 2025
New Delhi