In this policy brief, the author analyses the key outcomes from the recently concluded comprehensive FTA between India and the UK that was announced by Prime Minister Narendra Modi and Prime Minister Keir Starmer on May 6, 2025, along with a bilateral Double Contribution Convention. While the full texts of these documents have not been made public, pending legal scrubbing and formal signing, broad features of the agreements along with the main benefits that may accrue have been spelt out in press releases and on government websites.
A clear understanding of the commitments made by India in return for the concessions secured will be important, particularly as this FTA may set a gold standard for India’s future trade agreements. Since India is currently negotiating trade agreements with several economies, including the EU and the US, this matter becomes more pressing.
The policy brief, however, examines only certain key outcomes relating to market access, government procurement, digital trade, intellectual property and few regulatory aspects for which the details are publicly available.
The author brings out the many ‘firsts’ that may mark the FTA in terms of India’s commitments. First, India has given the best available access in its comprehensive FTAs to the UK covering 90% of tariff lines, with duty elimination on 85% of them. Secondly, India has opened up the passenger car segment, an excluded item in earlier FTAs, with some limited quotas. Third, India has also opened up government procurement with some clear commitments for the first time. In return, India has secured duty free access in the UK with tariff elimination on 99% of the tariff lines, covering virtually all of India’s current exports.
India’s services trade with the UK, rather uniquely, exceeds merchandise trade in value in both directions. In that sense, the substantial commitments apparently made by either side should boost this trade even further. This is particularly so for Indian companies and professionals who will now be exempt, under the Double Contribution Convention, from paying social security contributions in the UK for a period of three years when these professionals are sent by their company for temporary work.
In all the foregoing, the author clearly points to areas where the FTA has made some good advances, while also indicating where perhaps more could have been attempted. A finer and fuller analysis of the FTA will, however, need to await the publication of the full text.
Finally, the brief also draws attention to the importance of the early conclusion of the bilateral investment protection agreement between the two countries that is currently under negotiation. India’s FDI stock is steadily rising in the UK, and for the last three years it has been the second largest FDI origin country. Such an agreement, along with the FTA, could also facilitate a significant revival of interest of British investors in India’s growth story.
To read this DPG Policy Brief Vol. X, Issue 18, please click “The India-UK FTA”.
A clear understanding of the commitments made by India in return for the concessions secured will be important, particularly as this FTA may set a gold standard for India’s future trade agreements. Since India is currently negotiating trade agreements with several economies, including the EU and the US, this matter becomes more pressing.
The policy brief, however, examines only certain key outcomes relating to market access, government procurement, digital trade, intellectual property and few regulatory aspects for which the details are publicly available.
The author brings out the many ‘firsts’ that may mark the FTA in terms of India’s commitments. First, India has given the best available access in its comprehensive FTAs to the UK covering 90% of tariff lines, with duty elimination on 85% of them. Secondly, India has opened up the passenger car segment, an excluded item in earlier FTAs, with some limited quotas. Third, India has also opened up government procurement with some clear commitments for the first time. In return, India has secured duty free access in the UK with tariff elimination on 99% of the tariff lines, covering virtually all of India’s current exports.
India’s services trade with the UK, rather uniquely, exceeds merchandise trade in value in both directions. In that sense, the substantial commitments apparently made by either side should boost this trade even further. This is particularly so for Indian companies and professionals who will now be exempt, under the Double Contribution Convention, from paying social security contributions in the UK for a period of three years when these professionals are sent by their company for temporary work.
In all the foregoing, the author clearly points to areas where the FTA has made some good advances, while also indicating where perhaps more could have been attempted. A finer and fuller analysis of the FTA will, however, need to await the publication of the full text.
Finally, the brief also draws attention to the importance of the early conclusion of the bilateral investment protection agreement between the two countries that is currently under negotiation. India’s FDI stock is steadily rising in the UK, and for the last three years it has been the second largest FDI origin country. Such an agreement, along with the FTA, could also facilitate a significant revival of interest of British investors in India’s growth story.
To read this DPG Policy Brief Vol. X, Issue 18, please click “The India-UK FTA”.
