India’s Prime Minister Narendra Modi is in London to sign a significant trade agreement with the UK, marking a momentous achievement in the face of ongoing global trade uncertainties. This accord, the first of its kind for India outside Asia, is seen as a crucial post-Brexit victory for Britain and heralds the beginning of a deep economic partnership between the two nations.
The agreement is set to facilitate 99% of Indian exports to the UK, including gems, textiles, and processed foods, to be tariff-free, reflecting a move that India’s Commerce Minister Piyush Goyal negotiated firmly, securing important concessions on work visas and insurance exemptions for Indian professionals in the UK. Meanwhile, the UK will undergo phased tariff reductions on 90% of its exports to India, with notable adjustments for British cars and scotch whisky.
India has carefully kept agriculture off the negotiation table, maintaining a stance it has taken in talks with the US, while the nation’s foreign direct investment, which has seen a decline, is expected to be revived through this deal. Despite the broad agreements, the fine details are to be scrutinized, including managing potential backlash from domestic producers worried about competition from the UK and addressing omissions like financial services and the proposed British carbon tax deemed as detrimental to India’s exports.
An era of broader economic cooperation is emerging from this deal, with Britain gaining access to India’s government procurement market, potentially benefiting sectors such as clean energy and infrastructure. The outcomes promise a substantial boost for both economies, albeit the full impact remains contingent on parliamentary ratification and the handling of lingering issues.
Source: https://www.theguardian.com/politics/2025/jul/23/india-narendra-modi-uk-state-visit-sign-landmark-trade-deal
