From Johnson to Starmer, India-UK agree on FTA after nearly 40 months of talks

Nasscom hails India-UK FTA as a game-changer for tech and services sector

On May 6, 2025, India and the UK agreed upon a bilateral trade deal after more than three years of negotiations under successive governments.

The two nations launched negotiations for a Free Trade Agreement (FTA) in January 2022 under the then Borish Johnson-led Conservative government in Britain.

Talks for the FTA were officially launched in a meeting in New Delhi between International Trade Secretary Anne-Marie Trevelyan’s and Minister of Commerce and Industry Piyush Goyal.

Back in 2022, the proposed deal between UK and the world’s biggest democracy, was expected to boost total trade by up to £28 billion a year by 2035.

Initially, both sides set a deadline of Diwali 2022, however due to contentious issues ranging from rules of origin, London’s demand for tariff concessions on electric vehicles, and norms about services, a trade deal wasn’t secured by then.

Then in October 2022, when Rishi Sunak formally took charge as Britain's first Indian-origin Prime Minister, his roots fuelled speculations about a quick turnaround for the trade deal with India.

While there were expectations that both nations could clinch the deal by March 2024 before India heads for general elections, unresolved issues around London’s push for major tariff cuts on whisky and gin as well as New Delhi’s ask for easier mobility norms caused talks to linger on.

As a result, talks between the two were stalled in May 2024 ahead of the UK general elections.

Nearly a year after the pause in talks for the proposed FTA, India and UK resumed negotiations in early 2025 under the Keir Starmer-led Labour Party.

The Labour Party's intention to continue to pursue the FTA with India was clear as their manifesto outlining the programme for the government for the next five years in 2024 mentioned seeking a new strategic partnership with India, including the trade pact.

Notably, Piyush Goyal spoke about restarting FTA talks after meeting UK Business and Trade Secretary Jonathan Reynolds, who is on a three-day visit to India back in February of this year.

Less than three months after resumption of talks, India and the UK have now secured this long-pending Free Trade Agreement, which is expected to boost bilateral trade by £25.5 billion.

Currently, the total trade (goods and services) between the UK and India was £42.0 billion in the four quarters to the end of Q2 2024, an increase of 9.7-percent year-on-year.

This level of trade has almost doubled from before the pandemic - in 2019, the year before the pandemic, UK-India trade was only £24.1 billion.

And while Indian exports are set to benefit from duty elimination on about 99 percent of tariff lines, India has agreed to half import taxes on British whisky and gin to 75 percent in a phased manner.

The FTA between India and UK has 26 chapters including goods, services, investments, and intellectual property rights.