The India-UK Free Trade Agreement (FTA), finalised in 2025, marks a significant milestone in bilateral relations. Initiated in 2022 during former UK Prime Minister Boris Johnson’s tenure, the agreement aims to boost trade and economic cooperation between the two nations, creating new opportunities for Indian businesses, particularly Micro, Small, and Medium Enterprises (MSMEs).
Key Fact: The India-UK FTA, concluded after years of negotiations, strengthens the Comprehensive Strategic Partnership and enhances bilateral trade, valued at £40.9 billion as of late 2024.
Negotiations for the FTA began post-Brexit, as the UK sought new trade partnerships. India, viewed as a vital trade partner, became a priority for the UK amid shifting global economic dynamics. The agreement’s finalisation, spanning multiple UK political administrations, reflects a bipartisan commitment to strengthening India-UK ties.
The FTA is expected to significantly increase bilateral trade, with India being the UK’s 11th largest trading partner, contributing 2.4% to the UK’s total trade as of late 2024. By reducing tariffs and improving market access, the agreement fosters economic growth, particularly for Indian MSMEs. Strategically, it reinforces the economic pillar of the Comprehensive Strategic Partnership, paving the way for collaboration in defence, education, and technology.
Key Points for General Knowledge:
- India-UK FTA: Finalised in 2025, started in 2022.
- Trade Volume: £40.9 billion as of late 2024.
- Significance: Enhances trade, supports Indian MSMEs, and strengthens strategic partnership.
- Future Prospects: Collaboration in defence, education, and technology.
- Key Leaders: PM Narendra Modi and UK PM Keir Starmer.