PM Modi in London for historic FTA signing: India, UK seal landmark trade pact to redefine ties

Prime Minister Narendra Modi arrived in London early July 24 for the formal signing of a landmark Free Trade Agreement (FTA) with British Prime Minister Keir Starmer — a sweeping economic pact both nations have hailed as a generational turning point in bilateral ties.

“This visit will go a long way in advancing the economic partnership between our nations,” Modi said in a post on X. “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.”

Modi was received with a rousing welcome from the Indian diaspora, photos of which he shared online. “Touched by the warm welcome from the Indian community in the UK. Their affection and passion towards India’s progress is truly heartening,” he wrote on X.

A deal three years in the making

The agreement — announced in principle in May — comes after prolonged delays caused by political turmoil in Britain. With Labour's landslide victory in the recent elections, Starmer moved swiftly to complete the deal, calling it a “landmark” moment that will inject billions into the UK economy.

“This is a major win for Britain,” Starmer said on the eve of the signing. “It will create thousands of jobs, unlock new opportunities for businesses, and deliver on our Plan for Change by putting more money in the pockets of hardworking Brits.”

The FTA is projected to increase bilateral trade by £25.5 billion annually and is seen as India's most consequential trade agreement with a Western nation since it walked away from the China-led RCEP bloc in 2019.

What the FTA delivers

The agreement covers virtually the entire spectrum of trade, eliminating tariffs on 99% of tariff lines that account for nearly all bilateral trade. For India, this opens doors for key exports such as textiles and leather goods, while Britain gains deeper access to India’s vast consumer market for premium goods — from high-end automobiles and cosmetics to medical devices and whisky.

Highlights include:

• Whisky tariffs halved from 150% to 75%, and gradually lowered to 40% over 10 years
• British exports face lower average Indian tariffs, slashed from 15% to just 3%
• Indian exporters gain preferential access in sectors including garments, pharmaceuticals, and services
• Social security pact signed, preventing double contributions by workers and businesses
• Commitments on IP rights, innovation, and procurement reform

According to the UK’s Department for Business and Trade, 26 British firms — including aerospace giants Airbus and Rolls-Royce — are now poised to scale up operations in India. Aircraft deliveries, many powered by Rolls-Royce engines, will begin shortly.

British officials also confirmed nearly £6 billion in fresh investments and export deals tied to the FTA.

Strategic pivot to 2035

Beyond economics, Starmer said the FTA lays the foundation for a broader “Vision 2035” — deepening strategic alignment, with a strong emphasis on defense cooperation and shared global priorities.

“This isn’t just about trade,” Starmer said. “It’s about shaping a partnership that delivers for our people and meets the demands of a changing world.”

As Modi and Starmer prepare to sign the historic pact, both leaders appear united not just in celebrating a diplomatic milestone — but in charting a future that links prosperity with shared purpose.