India and the United Kingdom officially signed a long-awaited Free Trade Agreement (FTA) on Thursday in the presence of Prime Minister Narendra Modi and UK Prime Minister Keir Starmer. This deal, finalized after three years of negotiations, aims to deepen economic cooperation and significantly increase trade between the two nations.

PM Modi wrote on his social media account X (formerly Twitter), " 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 professionals."

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

Officials estimate the FTA will boost bilateral trade by about $34 billion annually.

Major Benefits for Indian Exports

The agreement will remove tariffs on about 99% of Indian exports, offering comprehensive market access for goods across almost all sectors. Indian products like textiles, footwear, gems and jewellery, seafood, and agricultural produce will now find it easier to enter the UK market.

In return, British products—such as whisky, cars, and medical devices—will enter India at much lower duties. India’s average tariff on UK imports will drop from 15% to 3%, making British goods more affordable.

PM Modi and PM Starmer Welcome the Deal

Prime Minister Narendra Modi praised the agreement, calling it a “historic” moment for both countries. He said, “This Agreement is not just an economic agreement but also the plan for a shared prosperity... It will especially benefit Indian youth, farmers, fishermen and the MSME sector.”

Modi noted that products like medical devices from the UK will now be available to Indian consumers at affordable prices.

UK Prime Minister Keir Starmer said, “It is a deal that will bring huge benefits to both of our countries, boosting wages, raising living standards and putting more money in the pockets of working people. It is good for jobs, it is good for business.”

He also described the FTA as the most important trade agreement the UK has signed since leaving the European Union.

Opportunities for Indian Businesses and Workers

Indian leather and footwear exports to the UK could now cross $900 million, helping small artisans and local businesses thrive. The FTA offers duty-free access to the UK’s $23 billion market, giving Indian MSMEs an edge over competitors from Bangladesh, Cambodia, and Pakistan in labour-intensive sectors like:

• Leather and footwear

• Textiles and clothing

• Furniture and sports goods

• Gems and jewellery

Women entrepreneurs, artisans, and craftsmen are expected to benefit from improved financial stability.

Encouraging Digital Growth and Sustainability

The deal also promotes digital trade and sustainable manufacturing. Indian MSMEs are encouraged to adopt e-commerce platforms and eco-friendly production processes. This can help Indian products reach new international markets more efficiently.

Intellectual Property and Market Access Improvements

The agreement includes stronger protection for intellectual property rights and geographical indications. This change could help traditional Indian products gain more global recognition and fetch better prices abroad.

Moreover, key sectors such as marine products, agriculture, chemicals, pharmaceuticals, electronics, and engineering are set to benefit from broader global access through this agreement.