India's Union Cabinet gave the green light on Tuesday for a free trade agreement (FTA) between India and the United Kingdom, according to official sources. The deal, known as the Comprehensive Economic and Trade Agreement, will be signed in London on July 24.
Prime Minister Narendra Modi will travel to the United Kingdom and the Maldives on a four-day official visit beginning Wednesday. During this visit, he will sign the trade pact. Commerce and Industry Minister Piyush Goyal will accompany him to London for the signing ceremony.
India and the UK had wrapped up negotiations for the agreement on May 6. The pact aims to boost economic ties between the two nations.
The agreement removes or lowers taxes on goods both countries trade. It especially helps labour-intensive sectors like leather, footwear, and textiles, boosting India's exports. On the other hand, British products like whisky and cars will become cheaper in India.
The overall goal is to double bilateral trade between the two nations to $120 billion by 2030.
The FTA includes sections on:
Trade in goods and services
Innovation and technology cooperation
Government procurement rules
Intellectual property rights
Typically, Commerce Ministers from both countries sign the final document.
After signing, the agreement must be ratified by the British Parliament before it comes into effect. In India, Cabinet approval is usually enough for implementation.
The two governments have also concluded talks on a Double Contribution Convention Agreement, often referred to as a social security pact. This will prevent Indian professionals working in the UK for a short time from paying into both Indian and UK social security systems.
Although the trade pact and social security agreement are ready, negotiations on a separate Bilateral Investment Treaty (BIT) are still ongoing.
Free trade agreements usually remove or lower customs duties on most goods traded between the two countries. They also simplify rules to encourage the flow of services and investments.
In 2024–25, India's exports to the UK grew by 12.6% to $14.5 billion, while imports rose by 2.3% to $8.6 billion. Total bilateral trade increased from $20.36 billion in 2022–23 to $21.34 billion in 2023–24, reflecting steady growth in economic ties.
