India-UK trade deal to be signed during PM Narendra Modi's visit

India and the United Kingdom are set to finalise a free trade deal on Thursday as part of Prime Minister Narendra Modi's visit to the UK. Foreign Secretary Vikram Misri on Tuesday said that last-minute "legal scrubbing" is currently underway.

“This is a significant agreement,” Misri told reporters. “There is the obvious legal scrubbing, et cetera, that any such agreement needs to go through. We are continuing to work on those and last-minute work on that is continuing,” he said.

PM Modi will embark on an official visit to the United Kingdom on Wednesday for discussions with UK Prime Minister Keir Starmer. This will be PM Modi’s fourth visit to the United Kingdom since assuming office. He has visited previously in 2015 and 2018, and he was there in 2021 for the COP26 summit in Glasgow.

Bilateral trade between India and the UK crossed $55 billion in 2023-24, said Misri. “The UK is also the sixth largest investor in India, with a cumulative investment of $36 billion. Interestingly, India itself is a large source of Foreign Direct Investment in the UK, with a cumulative investment of close to $20 billion. There are close to a thousand Indian companies in the UK that provide employment to nearly 100,000 people and have a cumulative revenue of over $91 billion,” Misri added.

In May 2025, both India and the UK announced that they had concluded the FTA talks, marking a significant milestone in their strategic partnership. Under the agreement, India will reduce tariffs on British whisky, cars, and certain food products, while the UK will grant duty-free entry to Indian textiles and electric vehicles.

For India, the FTA is likely to have a positive impact on manufacturing across labour and technology-intensive sectors. It also opens up export opportunities for sectors such as textiles, marine products, leather, footwear, sports goods and toys, gems and jewellery and other sectors such as engineering goods, auto parts and engines and organic chemicals. This is expected to substantially improve Indian goods competitiveness in the UK vis-a-vis other countries.

As part of the trade deal, the UK will eliminate tariffs on 99% of Indian exports, encompassing textiles, footwear, and food items like frozen prawns, potentially leading to reduced prices for UK consumers. The reduction of non-tariff barriers is expected to ensure free flow of goods and services.

The FTA also offers improved business mobility. It includes a social security agreement which exempts temporary Indian workers in the UK from dual contributions for three years, reducing operational costs for SMEs sending employees abroad.

The India-UK Free Trade Agreement (FTA) is set to significantly boost bilateral trade to over $60 billion by 2030 through the elimination of tariffs on 99% of Indian exports, including textiles, leather, and auto parts, according to a report by the PHD Chamber of Commerce and Industry (PHDCCI).

Within the last year itself, Prime Minister Modi and Prime Minister Starmer have already met twice, first on the sidelines of the G20 summit in Rio de Janeiro last year, and more recently, just last month, in June, in Kananaskis in Canada, on the sidelines of the G7 summit.