In a landmark ceremony at Chequers, UK Prime Minister Keir Starmer and Indian Prime Minister Narendra Modi signed a £6 billion free trade agreement, concluding over three years of negotiations. This pact is the largest trade deal Britain has signed since Brexit, and it signals a bold pivot toward high-growth economies and strategic alliances.
Summary: Key Gains from the £6 Billion India–UK Trade Deal
Signed on July 24, 2025, the India–UK free trade agreement marks a transformative moment in bilateral relations and post-Brexit trade strategy. Key benefits include:
- Tariff Reductions: UK exports to India such as whisky, cars, and medical devices will see average tariffs fall from 15% to 3%, with whisky duties halved immediately and further reduced over the next decade.
- Expanded Market Access: Indian textiles, jewellery, and food products gain easier entry into the UK, lowering consumer prices and boosting trade volumes.
- Job Creation and Investment: The deal is expected to generate 2,200 new jobs in the UK and attract £6 billion in investment from British and Indian businesses.
- Labour Mobility Reform: Extended national insurance exemptions for seconded workers streamline cross-border employment and reduce payroll costs.
- Strategic Collaboration: Enhanced cooperation in defence, education, climate, and technology, alongside new frameworks for tackling illegal migration and organised crime.
Projected to boost the UK economy by £4.8 billion annually and increase bilateral trade by £25.5 billion, this agreement sets the stage for a new era of economic and diplomatic partnership.
Historical Context: From Brexit Uncertainty to Bilateral Ambition
The UK’s departure from the European Union in 2020 left a vacuum in its trade architecture. Initial efforts to secure deals with major economies were slow, with talks between India and the UK beginning in 2022 under Boris Johnson. Disagreements over tariffs, labour mobility, and financial services stalled progress.
The breakthrough came in May 2025, when negotiators finalized terms that balanced economic ambition with political pragmatism. The July signing reflects a shared desire to deepen ties, diversify trade portfolios, and position both nations as global economic leaders.
Core Provisions of the Agreement
Tariff Reductions on UK Exports
- Average tariffs on UK goods entering India will fall from 15% to 3%, dramatically improving competitiveness.
- Whisky duties, previously at 150%, are halved to 75% immediately and will drop to 40% by 2035.
- British cars, taxed at 110%, will see duties fall to 10%, subject to export quotas.
These reductions unlock access to India’s rapidly expanding middle class, creating new demand for premium UK products and services.
Market Access for Indian Goods
- Indian exports such as textiles, footwear, seafood, and jewellery will face lower tariffs in the UK.
- This is expected to reduce consumer prices, increase product diversity, and strengthen India’s footprint in UK retail and food sectors.
The move also supports small and medium-sized Indian enterprises, many of which rely on UK buyers for seasonal and bulk orders.
Labour Mobility and Social Security Reform
- Workers seconded between the two countries will benefit from national insurance exemptions for up to three years.
- This eliminates double contributions and simplifies payroll for multinational firms.
The reform aligns with existing UK agreements with 17 other nations, including the EU, US, and South Korea, and facilitates cross-border talent exchange in sectors like tech, finance, and education.
Strategic Sector Collaboration
- The deal includes joint initiatives in defence, education, climate resilience, and emerging technologies.
- A new India–UK Vision 2035 strategy outlines long-term goals in telecom security, green energy, and academic exchange.
This framework positions both nations to co-lead in global innovation, especially in areas like AI governance, cybersecurity, and clean manufacturing.
Migration and Security Frameworks
- A new plan to tackle illegal migration, fraud, and organised crime includes: Criminal record sharing Enhanced watchlists Travel ban enforcement mechanisms
These measures strengthen law enforcement cooperation and streamline judicial processes, reinforcing trust and transparency.
Economic Impact and Industry Response
The UK government estimates:
- A £4.8 billion annual boost to the UK economy.
- £6 billion in new investment from British and Indian businesses.
- 2,200 new jobs created across sectors including manufacturing, logistics, and retail.
Industry leaders have responded enthusiastically:
- The Confederation of British Industry (CBI) called it a “springboard for long-term partnership and prosperity.”
- Indian firms are expected to expand UK operations, while British exporters gain access to India’s advanced manufacturing, automotive, and healthcare sectors.
Strategic Implications: A New Chapter in Bilateral Relations
This agreement is more than a trade deal it’s a geopolitical statement.
- For the UK, it demonstrates post-Brexit agility and a commitment to global economic engagement.
- For India, it solidifies its role as a strategic partner to advanced economies and sets a precedent for future deals with the EU and other regions.
The pact also strengthens ties rooted in shared history, culture, and diaspora connections, with both leaders emphasizing the importance of deepening collaboration.
Final Thoughts: A Bold Blueprint for Shared Prosperity
The July 24 trade deal between India and the UK is a milestone in modern diplomacy, blending economic pragmatism with strategic foresight. It reflects a mutual recognition that interdependence not isolation is the path forward in a volatile global landscape.
This agreement:
- Repositions Britain as a proactive trade player beyond Europe.
- Elevates India’s global standing as a reliable partner in high-value sectors.
- Empowers businesses to innovate, expand, and compete on a larger stage.
But this is just the beginning. The deal creates unprecedented business opportunities:
- UK firms can now scale exports to one of the world’s fastest-growing consumer markets.
- Indian companies can establish operations in the UK with reduced regulatory friction.
- Joint ventures in green tech, automotive, and digital services are now more viable than ever.
The pact also sends a powerful signal to global investors: India and the UK are open for business and ready to lead. If implemented with care and ambition, this agreement could usher in a golden era of cooperation, innovation, and shared prosperity between two of the world’s most dynamic economies.
How Peacock Tariff Consulting Can Help Businesses Navigate the New Deal
With the India–UK trade agreement now signed, businesses face a wave of new opportunities and complex regulatory changes. That’s where Peacock Tariff Consulting comes in.
We specialize in helping companies:
- Identify tariff reductions relevant to their product lines and supply chains.
- Optimize customs strategies to take full advantage of new duty structures.
- Navigate labour mobility provisions, including national insurance exemptions and visa planning.
- Assess compliance risks in cross-border transactions, especially in regulated sectors like defence and healthcare.
- Develop market entry strategies for Indian and UK firms looking to expand operations.
Whether you’re a machinery exporter, a textile manufacturer, or a tech startup exploring joint ventures, Peacock Tariff Consulting offers tailored guidance, real-time updates, and strategic insights to help you thrive under the new trade framework.
Let us help you turn policy into profit. Reach out today to schedule a consultation and unlock the full potential of the India–UK trade deal.