India-UK FTA Highlights: ‘Trade deal to benefit youth, farmers, fishermen, and MSME sector’, says PM Modi

British whisky producers will benefit from tariffs being slashed in half — reduced immediately from 150% to 75%. It will then drop even further to 40% over the next ten years.

A statement released by the UK ahead of the signing noted that it would give the country an advantage over international competitors in reaching the Indian market.

A British government statement noted on Thursday that India’s average tariff on UK products will drop from 15% to 3% under the to-be-signed India-UK FTA. The remarks came just ahead of the scheduled signing ceremony in the presence of Prime Minister Narendra Modi and his British counterpart Keir Starmer.

The UK statement asserted that British companies selling products to India — from soft drinks and cosmetics to cars and medical devices — will find it easier to sell to the Indian market.

According to GTRI report, India has not agreed to cut import taxes for the UK on certain items like dairy products, apples, cheese, oats, and animal or vegetable oils. Some industrial goods—such as plastics, diamonds, silver, smartphones, telecom equipment, and optical fibre cables, are also not included in the tariff cuts.

For products like ceramics, petroleum items, some chemicals, aircraft engines, and engineering tools, any tax reduction will happen slowly over a longer period of time.

As per the GTRI report, India currently charges import taxes between 10% and 20% on products like soaps, shaving cream, nail polish, and perfumes. But under the new trade deal, these taxes will either be removed right away or slowly reduced over the next 10 years.

The India-UK FTA is expected to greatly help women entrepreneurs and workers in India, a report by ANI said. It aims to support women in various fields—from handloom and crafts to tech and clean manufacturing—by making it easier for them to grow their businesses, get funding, and connect with global markets.

A major part of the deal includes removing taxes on 90% of product categories and almost all trade value. This will give Indian women producers tariff-free access to the UK’s $23 billion market for goods like textiles, leather, and footwear. Earlier, Indian exporters, especially women faced higher import duties compared to countries like Bangladesh or Pakistan. The FTA will help remove this gap.

The FTA will help India’s farming sector move from selling in large quantities locally to focusing on high-value products for the global market. This marks an important step in making Indian agriculture more export-oriented and globally competitive.

India’s agriculture exports to the UK are expected to rise by over 20% in the next three years. More than 95% of Indian agricultural and processed food items will have zero duties under the deal. This includes fruits, vegetables, cereals, ready-to-eat foods, and more. Lower import costs will help these products compete better in UK supermarkets and Indian stores abroad.

The FTA will allow several Indian staples such as turmeric, pepper, and cardamom to enter the UK market without any import tax. Processed items like mango pulp, pickles, pulses, and spice mixes will also benefit. This will boost profits for Indian farmers and exporters and increase their reach in the UK market.

Officials have said that farmers in India are likely to gain significantly from the India-UK FTA. Once the deal is signed, Indian farm produce will get access to high-value markets in the UK. This access could match or even surpass the benefits currently enjoyed by exporters from European nations like Germany and the Netherlands.

Congress leader Jairam Ramesh has once again criticised the Modi government, just before the India-UK Free Trade Agreement (FTA) is set to be signed. He said that instead of only focusing on trade, India should also push for a stronger agreement to bring back economic fugitives from the UK. Ramesh pointed out that Vijay Mallya, Nirav Modi, and Lalit Modi, who are all facing serious financial fraud charges in India, are still living in the UK, avoiding justice. He suggested that there could be more such individuals hiding abroad.

In a post on X, Ramesh said that while the FTA is being signed in London in the presence of PM Modi, what India truly needs is a proper Fugitive Transfer Agreement.

India has agreed to stop charging import taxes on medical devices coming from the UK. But there’s a concern with how the UK defines “Made in UK.” According to UK rules, a product can carry this label even if it’s only packed or sold there, without actually being made in the country. This means products from places like China or other parts of Europe could be sent through the UK, labeled as UK-made, and then enter India without any import duty. This could lead to misuse of the trade deal.

The India-UK trade deal is not just about buying and selling goods. It also includes agreements on services, helping investments, easier movement of workers, government contracts, and working together on technical rules. However, some areas like farming and certain financial services have been left out of the deal for now.

Here’s how Prime Minister Narendra Modi was greeted by the Indian diaspora in the UK on his arrival. Watch video:

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#watch | UK | Prime Minister Narendra Modi was welcomed and greeted by the members of the Indian diaspora on his arrival in London pic.twitter.com/ROZBag7Kjh

— ANI (@ANI) July 24, 2025

– India will reduce the average import tax on goods from the UK from 15% to just 3%.

– The UK will remove import taxes on 99% of India’s marine exports, including shrimp, fish meal, and feed.

– Indian leather and footwear exports will no longer face the 16% duty. It will now be zero.

– Import duties on Indian textiles will also drop from 12% to zero.

– Indian products like footwear, textiles, and leather will get better access to the UK market compared to countries like Bangladesh, Pakistan, and Cambodia.

– Engineering goods from India will now face no import tax in the UK (down from 18%).

– India’s generic medicine industry will benefit, as medicines will now enter the UK with zero duty.

– Gems and jewellery, toys, plastics, and chemicals from India will also see lower import taxes.

– The deal will support the movement of skilled professionals in fields like digital trade and new technologies.

– About 95% of India’s agricultural and processed food exports will now have zero duty.

– Core farm areas like dairy, apples, oats, and edible oils are not part of this deal.

– Duties are removed on India’s exports of fruits, vegetables, cereals, pickles, spices, processed foods, and ready-to-eat meals.

It is anticipated that Prime Minister Narendra Modi might raise the issue of bringing back the economic offenders to India, during his meeting with UK Prime Minister Keir Starmer. Many are watching the meeting closely as the attention is once again on the long-running problem of wanted individuals hiding in the UK. Over the past ten years, many high-profile Indians accused of financial crimes have moved to Britain including Vijay Mallya, Nirav Modi, Lalit Modi among others. They have taken advantage of legal gaps and slow extradition processes to avoid facing the law in India.

The effects of the India-UK trade deal on car prices will take about one to two years to show. So, if you’re expecting British cars in India to become much cheaper right away, that’s not likely. It also depends on which cars are included in the deal. For example, models like the Range Rover and Range Rover Sport are already assembled in India, so their prices won’t change. Some fully imported Land Rover models (called CBUs) might see a price drop, but only after they are approved under the deal and officially launched, which could take up to two years.

Only a small number of imported cars may actually become cheaper. However, this deal might encourage more car brands from the UK to sell their imported vehicles in India. That could mean lower prices for Mini cars or new UK-made models entering the market. Still, many details like quotas and classifications are yet to be confirmed. If you’re hoping to buy a Defender or Range Rover at a much lower price soon, it’s unlikely to happen right now.

Before leaving for the UK, Prime Minister Modi said that India and the UK have a strong and broad strategic partnership, which has grown a lot in recent years. He noted that both countries work closely in many areas, such as trade, investment, technology, defence, education, research, health, sustainability, and cultural and people-to-people connections.

UK Prime Minister Keir Starmer is hosting PM Narendra Modi at Chequers, the official country house of the British PM, about 50 km from London. They will sign the FTA that is expected to help both countries grow their economies and create thousands of jobs. The two leaders will also share their plans for a stronger and closer partnership over the next ten years.

Official data shows that the UK currently buys goods worth £11 billion from India. With lower import taxes, businesses in areas like high-tech manufacturing and consumer products are expected to save money on costs. The UK’s Department for Business and Trade (DBT) predicts that exports from the UK to India could grow by almost 60%, adding about £15.7 billion. This would boost trade between the two countries by nearly 39% over time.

The India-UK trade deal, finalised after three years of talks, is expected to give Indian products full access to the UK market in all areas. Officials have said that around 99% of product types will see tariffs removed, covering nearly all of the value of goods traded between the two countries. This means Indian exporters will be able to sell their products in the UK more easily and at lower costs.

UK Foreign Secretary David Lammy has said that along with the FTA between PM Modi and UK Prime Minister Keir Starmer, the two countries will also sign a new UK-India Vision 2035 agreement on Thursday. In an interview with PTI during Modi’s visit to the UK, Lammy said this new agreement will build on the FTA and help create more opportunities for both countries, especially in defence and technology. According to Lammy, the FTA is the most important trade deal the UK has made since leaving the European Union, and also the most wide-ranging agreement India has ever signed.

Ahead of signing the FTA, UK Prime Minister Keir Starmer hailed the landmark deal and said that it is a “major win” for Britain. He added that the FTA will create thousands of jobs for the Britishers and

“unlock new opportunities for businesses and drive growth”.

Congress leader Jairam Ramesh has raised concerns about the India-UK trade deal, pointing to findings by the Global Trade Research Initiative, a Delhi-based think tank. He said the agreement would allow UK companies to take part in the purchase of goods and services from certain non-sensitive central government departments. This change could open up a large market to British firms. Until now, India had kept government procurement out of trade deals to protect local industries, but this policy shift could limit the country’s ability to support domestic businesses.

He also slammed India’s move to lower import duties on luxury cars, from 100% to just a 10% cess, saying it could weaken the “Make in India” campaign and set the stage for similar offers to the US and EU. Ramesh further pointed out that India failed to get an exemption from the UK’s carbon tax rule, which will now also affect ongoing talks with the European Union.

The deal between India and UK, called the Comprehensive Economic and Trade Agreement (CETA), was approved by India’s Cabinet on Monday. While it’s seen as a major step forward, it has caused a slowdown in luxury car sales. Britain is home to several high-end car brands like Jaguar, Land Rover (both owned by Tata Motors), Rolls Royce, Bentley, Aston Martin, Lotus, and McLaren. As part of the new agreement, the import tax on fully built luxury cars coming into India may drop from the current 75–125% to just 10%.

After hearing about this possible tax cut back in May, many wealthy Indian customers paused or cancelled their car bookings, a TOI report said. They are now waiting for the trade deal to be signed so they can buy the same cars at a much lower price.

Indian buyers will now find it easier to buy luxury car brands like Aston Martin and Jaguar Land Rover (which is owned by Tata Motors), as well as British brands like Diageo, known for selling Scotch whisky. Reports say this deal could help grow the UK’s economy by about £4.8 billion (around Rs 56,150 crore) every year. On the other hand, clothes, shoes, and food from India may become cheaper for people in the UK.

Apart from clothes, textiles, cars, and scotch, the agreement also includes deals in services. The UK will allow Indian chefs, yoga teachers, musicians, and other skilled professionals to work there for a short time. Indian workers sent to the UK won’t have to pay into the UK’s social security system for up to three years, possibly saving Indian companies around Rs 4,000 crore annually. The UK will also be allowed to bid on large Indian government contracts, as long as they are not sensitive projects. This gives them access to about 40,000 tenders worth over Rs 4 lakh crore every year.

After landing in London, Prime Minister Narendra Modi took to X and expressed his willingness for a stronger India-UK relationship.

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Landed in London.

This visit will go a long way in advancing the economic partnership between our nations. The focus will be on furthering prosperity, growth and boosting job creation for our people.

A strong India-UK friendship is essential for global progress. pic.twitter.com/HWoXAE9dyp

— Narendra Modi (@narendramodi) July 23, 2025

Prime Minister Narendra Modi has landed in London where the India community was seen giving him a warm welcome to the UK. Sharing the pictures on X, the PM said that he was touched by the Indian community’s affection and that their “passion towards India’s progress” was “truly heartening”.