UK and India Trade Pact Marks Historic Economic Shift as Starmer and Modi Seal Agreement

The United Kingdom and India have entered a new era of economic partnership following the signing of a landmark free trade agreement by Prime Minister Keir Starmer and Indian Prime Minister Narendra Modi. The deal, described by both leaders as a ‘historic day’, signals a major step-change in bilateral relations and is projected to boost the UK economy by £4.8 billion annually and attract £6 billion in investment from British and Indian businesses.

After more than three years of intense negotiations, the agreement will see average tariffs on UK goods exported to India cut dramatically from 15 per cent to just 3 per cent. The deal contains notable provisions for the UK’s whisky industry, with tariffs set to be halved initially then reduced further in the coming years, offering significant new opportunities for British exporters.

Both leaders highlighted the strategic value of the partnership, with Mr Modi characterising the UK and India as ‘natural partners’. Speaking from Chequers, Starmer’s country residence, the Prime Minister emphasised the significance of the deal not just for trade and investment, but for broader UK-India cooperation on a range of issues from climate to technology.

Despite widespread praise for the agreement’s commercial benefits, the deal is not without criticism. Observers from the Trade Justice Movement and the London Mining Network have raised concerns over the absence of binding labour rights and robust environmental protections, pointing to the need for further scrutiny around climate safeguards, particularly regarding India’s coal sector.

Ratification remains pending in both the UK and Indian parliaments, a process likely to unfold over several months. Negotiations continue separately on a bilateral investment treaty which could enhance the position of London’s financial services sector, though officials on both sides have downplayed immediate prospects for such an agreement. Talks over the UK’s proposed carbon border tax, which India opposes, are also ongoing.

The day’s agenda extended beyond economics. During the bilateral meeting, Starmer raised the case of Jagtar Singh Johal, a British Sikh activist detained in India for eight years whose imprisonment has drawn international concern. The government affirmed its commitment to seeking a resolution, ensuring the issue remains prominent within UK-India diplomatic engagement.

The trade agreement marks a transformative moment for UK-India relations, underpinning future growth while unlocking opportunities in a crucial global market. Business and policy observers will closely watch the ratification process and the evolution of this strategic partnership in the coming months.