The pact, finalised on 6 May after more than three years of negotiations, will eliminate import duties on 99 per cent of Indian exports to the UK—ranging from textiles and leather to gems and processed foods—offering new market opportunities across multiple sectors. In tandem, India will slash tariffs on key British products: Scotch whisky will see duties halved from 150 per cent to 75 per cent immediately, before decreasing further to 40 per cent over ten years, while automotive tariffs will fall to 10 per cent from over 100 per cent.
Legal “scrubbing” of the draft is occurring this week, and officials indicate the agreement will be signed in London shortly thereafter. The deal’s implementation, however, hinges on ratification by the British Parliament and India's Cabinet, meaning it may not enter into force for up to a year.
Once activated, the FTA is projected to lift bilateral trade by approximately £25.5 billion annually by 2040—equating to around US $34 billion—and elevate trade volumes from £42.6 billion in 2024. UK officials believe the pact will enhance GDP by an estimated £4.8 billion and stimulate £2.2 billion in wage growth over the next decade.
From India’s perspective, the zero-duty access to the UK market is expected to inject fresh vigour into labour‑intensive industries. The Apparel Export Promotion Council, for instance, regards it as “a bonanza” for garment exporters, underlining the potential impact on millions of workers. Beyond apparel, sectors such as marine products, leather, sports goods, toys, engineering items and auto components stand to gain.
UK industry leaders are also optimistic. The Scotch Whisky Association has hailed the agreement as “transformational”, expecting an additional £1 billion in exports to India over five years. Similarly, cosmetics, aerospace, medical devices, salmon, biscuits and other sectors will benefit from phased tariff reductions.
Labour‑mobility provisions and a social security pact have emerged as critical components of the package. Temporary Indian professionals—including musicians, chefs and yoga instructors—will benefit from three‑year exemptions on National Insurance contributions in the UK, a key demand during late-stage negotiations. A similar measure applies to British workers in India. These terms were finalised alongside the landmark agreement in New Delhi between 22 and 26 April.
Despite widespread support, the deal has provoked domestic unease in the UK. Critics argue the National Insurance exemption creates a “two‑tier” system favouring foreign workers—an argument emphasised by opposition figures such as Kemi Badenoch and Nigel Farage. The potential annual fiscal cost of these contributions is estimated at up to £200 million.
Gruelling concerns have also been voiced by segments of the UK pharmaceutical and technology sectors. They argue the agreement falls short on key caveats around intellectual property protection and digital trade commitments. The auto industry anticipates gains but cautions that tariff benefits for electric vehicles and other segments may be uneven.
Negotiations have covered 26 chapters, addressing goods, services, investments and intellectual property. Initial concerns involved whisky, EV tariffs, pharmaceutical access, carbon border taxes and social security reciprocity. By 9 April, negotiators reported that 90 per cent of issues had been resolved, and by 6 May Prime Minister Modi publicly confirmed agreement.
The deal is widely perceived as Britain’s most economically significant trade pact since its exit from the EU in 2020, while for India it represents the most ambitious trade accord to date. Indian Commerce Minister Piyush Goyal described it as a laser‑focused push toward global value‑chain integration.
Critics, however, caution against taking it as a panacea for India's broader economic challenges or for resolving UK political sensitivities. Although it contains strategic clauses on professional mobility and environmental standards, many of these await separate agreements or future negotiations.
Prime Minister Modi is expected in London later this month to witness the signing ceremony—possibly involving a Buckingham Palace reception and an address to Parliament—although those engagements have not been officially confirmed. Both governments emphasise that this agreement is not the end, but rather the foundation for a deeper strategic and economic partnership, with complementary deals on investment protection, carbon‑adjusted trade and financial services slated by year‑end.