UK and India Conclude Landmark Trade Deal to Boost Bilateral Relations

The United Kingdom (UK) and the Republic of India have finalized negotiations on a comprehensive Free Trade Agreement (FTA), heralded as the most advantageous trade deal India has ever reached with a foreign nation. Concluded on May 6, 2025, during high-level talks between UK Prime Minister and Indian Prime Minister Modi, the agreement aims to enhance economic ties between the two countries by facilitating trade worth an expected £25.5 billion annually. Key provisions include significant tariff reductions on major exports, particularly Scotch whisky, which will see tariffs decrease from 150% to 75% initially, reducing to 40% in ten years. This is anticipated to revitalize the Scottish whisky sector and create approximately 1,200 jobs across the UK. Economically, the deal is projected to increase UK GDP by £4.8 billion and boost wages by £2.2 billion annually, benefitting all parts of the UK. Although the announcement has sparked some debate regarding the potential tax implications for Indian workers in the UK—due to a Double Contributions Convention allowing them to continue paying social security in India—officials argue that this is standard practice and creates a fairer environment for business. Additionally, the agreement establishes important frameworks aimed at addressing corruption and enhancing intellectual property protections, demonstrating a commitment to regulatory integrity and collaboration between both nations. Overall, this trade deal is framed not just as an economic agreement but as a strategic partnership, promising to strengthen cooperation on global issues such as climate change and technological innovation, particularly through a recently launched Technology Security Initiative.