India–UK Seal Mega Trade Deal: Tariff Cuts, Market Gains, and a New Chapter in Post-Brexit Commerce

India and the United Kingdom on Thursday inked a comprehensive Free Trade Agreement (FTA) expected to supercharge bilateral commerce by $34 billion annually. 

Signed by Indian Commerce Minister Piyush Goyal and UK Trade Secretary Jonathan Reynolds, the deal was finalised in the presence of Prime Ministers Narendra Modi and Keir Starmer. Analysts say this deal signals a bold new era of strategic economic engagement between the two democracies.

Image Source: PM NaMo

After nearly three years of negotiations, this post-Brexit breakthrough has been hailed as the most significant FTA for both countries. For India, the deal unlocks unprecedented tariff-free access for 99% of its exports -- ranging from textiles, leather, and gems to generic medicines and agricultural goods. 

Indian agri-producers now stand on par with top EU exporters in the UK market, while leather exports are projected to grab 5% more market share in just two years. With electronics, chemical, and engineering sectors poised for exponential growth, and software services expected to expand 20% annually, Indian exporters are on the cusp of a golden era.

In return, British exporters win long-sought relief on tariffs that previously throttled key sectors. The Scotch whisky industry, previously slapped with a 150% duty, will now see phased tariff reductions to 40% over a decade. 

Electric vehicles from the UK, which faced an eye-watering 110% import tax, will now enter under a new 10% quota regime. Cosmetics, medical devices, and beverages will also become significantly cheaper for Indian consumers, with average UK export duties dropping from 15% to 3%.

A new chapter begins today in the India–UK economic partnership! The signing of the Comprehensive Economic and Trade Agreement (CETA) reflects our shared commitment to enhancing trade, driving inclusive growth and creating opportunities for farmers, women, youth, MSMEs, and… pic.twitter.com/FUOo4dkHLU

— Narendra Modi (@narendramodi) July 24, 2025

Importantly, British companies gain access to India’s massive public procurement market, and UK financial firms are guaranteed equal treatment -- a major win under the pact's dedicated financial services chapter. 

However, concerns over intellectual property were addressed: Indian negotiators ensured that the FTA protects the country’s ability to produce and export affordable generic medicines.

Prime Minister Keir Starmer announced over £6 billion in new investments and deals as a direct result of the pact, set to create over 2,200 jobs across the UK. Meanwhile, Indian firms are expected to increase their footprint in Britain, bolstering employment and local economies.

Pending cabinet approval in India and ratification by the UK Parliament, the FTA is also expected to pave the way for a separate Bilateral Investment Treaty (BIT), still under negotiation.