New Delhi, May 6, 2025 — In a momentous move toward deeper economic integration and strategic cooperation, Prime Minister Narendra Modi and UK Prime Minister Sir Keir Starmer have formally welcomed the successful conclusion of the India–UK Free Trade Agreement (FTA) along with the Double Contribution Convention. The two leaders, during a telephonic conversation held on Tuesday, hailed the development as a historic milestone in the ever-strengthening India–UK Comprehensive Strategic Partnership.
Transformative for Bilateral Ties
The agreement marks a new era of economic diplomacy between two of the world’s largest democratic and open-market economies. It is designed to strengthen economic linkages, accelerate innovation, and create robust employment opportunities across critical sectors such as pharmaceuticals, fintech, renewable energy, education, and artificial intelligence.
“This agreement paves the way for a new era of collaboration and prosperity,” said Prime Minister Modi, emphasizing its potential to elevate living standards, promote inclusive growth, and support India’s goal of becoming a $5 trillion economy.
Key Benefits of the India–UK Free Trade Agreement
1. Lower Tariffs and Easier Market Access
The FTA eliminates or reduces tariffs on a wide range of goods and services. This provides Indian exporters—including SMEs and startups—easier access to the UK market, particularly in sectors like textiles, automotive components, agriculture, and electronics. Simultaneously, UK firms will benefit from simplified entry into India’s vast consumer base, which is projected to reach 1.4 billion by 2030.
2. Boost to Services Sector and Professionals
One of the most critical aspects of the FTA is the liberalization of the services sector, which accounts for a major share of India’s GDP. Indian IT, financial, and consultancy firms will now be able to operate more freely in the UK, while professionals in healthcare, architecture, and finance will benefit from mutual recognition of qualifications and smoother visa and work permit processes.
3. Job Creation and Investment Flow
The FTA is expected to create thousands of jobs on both sides. According to preliminary estimates by trade analysts, bilateral trade could double within five years, and investment flows could increase by up to 35%, generating employment in manufacturing, logistics, education, and R&D hubs.
4. Support for Green and Digital Transitions
The agreement has provisions that promote green growth, including technology transfer and funding for renewable energy collaborations. Both countries will jointly work on climate-resilient infrastructure, clean hydrogen technology, and green finance—strengthening their shared commitment to a sustainable future.
Double Contribution Convention: Empowering the Global Workforce
The Double Contribution Convention, signed alongside the FTA, ensures that employees and employers operating across India and the UK will not be required to make social security contributions in both countries. This is a major boost for professionals, students, and corporate entities engaging in cross-border employment or internships. It will:
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Reduce financial and administrative burden on workers and businesses
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Encourage talent mobility by providing social security portability
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Facilitate intergovernmental coordination on pension benefits and welfare
Political and Strategic Significance
Prime Minister Keir Starmer noted that this economic milestone supports the UK’s “Plan for Change,” aimed at reducing trade barriers and strengthening international partnerships. “This deal reflects our commitment to a more secure, innovative, and economically diverse Britain,” he stated.
From India’s perspective, the FTA is part of its broader mission to diversify trade partnerships beyond traditional allies and strengthen its ‘Act East’ and ‘Global South’ strategies. With geopolitical shifts affecting global trade corridors, this partnership sends a strong message of stability, collaboration, and economic openness.
The Way Forward
Prime Minister Modi extended an invitation to PM Starmer to visit India, underlining the importance of sustained dialogue and high-level exchanges. Both leaders agreed to remain in close contact and monitor the implementation of the agreements to ensure tangible benefits for businesses and citizens alike.
This development not only deepens the economic and diplomatic bonds between India and the UK but also sets a precedent for modern, equitable, and forward-looking trade frameworks in the global economy.
For more info, check the press release on Ministry of External Affairs. here.
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