India-UK deal to boost bilateral trade by £25.5 billion: UK Trade Strategy report

Mint

4 hours ago

New Delhi: The recently finalised free trade agreement between the United Kingdom and India is expected to add £4.8 billion to the UK economy and £2.2 billion to annual wages, and increase bilateral trade by £25.5 billion, said the UK government's June Trade Strategy report.
The FTA deal, which reduces and liberalises tariffs, is set to open new opportunities for British exports, particularly in whisky and gin, while Indian consumers are set to gain greater access to premium UK products, it said.
In return, British consumers could benefit from lower prices on imported goods such as clothing, footwear, and food products, it added.
In FY25, bilateral goods trade between India and the UK stood at $22.69 billion. India exported goods worth $14.29 billion to the UK, while imports totalled $8.40 billion, yielding a trade surplus of $5.89 billion in India's favour.
The Trade Strategy report highlighted the trade deal with India as a key pillar in the UK's post-Brexit trade strategy, aimed at expanding global market access and deepening ties with one of the world's fastest-growing economies.
"Not only does our deal with India add £4.8 billion to the economy and £2.2 billion to wages each year, its reduced and liberalised tariffs means more whisky and gin is likely to be sold to Indian consumers and British shoppers could see cheaper prices on things like clothes, footwear and food products," the report said.
The India-UK FTA, once implemented, is expected to deliver immediate tariff savings of up to £400 million annually for UK exporters, purely from India reducing duties on existing trade, the report said, adding that the savings could rise to around £900 million a year over the next decade as tariff reductions are gradually phased in.
"This immediate relief represents a major advantage our businesses will enjoy over their international competitors," it added.
India-UK FTA negotiations concluded in May 2025, and legal teams from both sides are now engaged in final legal vetting and text review. The UK and India aim to sign the agreement by the end of July.
Separately, the UK is advancing negotiations on a trade agreement with the US.
"FTAs absolutely retain a central place in our armoury—the big win of the UK-India FTA shows the power they still hold," the report said.
"But the UK-US economic deal is a slightly different form of deal, the opening of a conversation rather than its conclusion, and somewhat more tightly drawn around some more obvious areas of mutual economic agreement," it added.