Prime Minister Keir Starmer has described the landmark UK-India trade agreement as the “most significant” since Britain left the European Union, as he welcomed Indian Prime Minister Narendra Modi to Chequers for the formal signing ceremony.
The comprehensive deal, worth nearly £6 billion in new investment and export opportunities, promises to dramatically reduce tariffs on British goods entering India while creating an estimated 2,200 jobs across the UK. The agreement was signed on Thursday by Business Secretary Jonathan Reynolds and his Indian counterpart Piyush Goyal at the Prime Minister’s country estate.
The two leaders embraced warmly as Modi arrived at Chequers, with Starmer declaring: “This is a historic day, a landmark moment for both of our countries. The UK-India deal is now signed, sealed and ready to be delivered, so it’s a real pleasure to welcome you.”
Tariff Reductions and Economic Impact
Under the new arrangements, average import duties on UK goods entering India will plummet from 15 per cent to just three per cent, marking one of the most substantial tariff reductions India has ever agreed to with a trading partner.
The deal includes significant benefits for key British export sectors. Whisky tariffs will be halved from 150 per cent to 75 per cent initially, before falling further to 40 per cent by the tenth year of the agreement. Automotive tariffs will drop from over 100 per cent to 10 per cent under a quota system.
British consumers are also set to benefit from reduced tariffs on everyday items including clothing, footwear and food products imported from India, which are expected to lower prices on the high street. Indian textiles and jewellery will become cheaper to import into the UK market.
Look, we both know this is the biggest and most economically significant trade deal that the UK has made since leaving the EU,” Starmer said. “And I think I can say that it’s one of the most comprehensive deals that India has ever done. So thank you, Prime Minister, for your leadership and for your pragmatism.”
Vision 2035 Strategic Partnership
Alongside the trade agreement, the two leaders unveiled the ambitious UK-India Vision 2035, a decade-long strategic roadmap that extends cooperation far beyond commerce into defence, climate action, technology and education.
The Vision 2035 framework includes plans for enhanced collaboration in artificial intelligence, quantum computing, biotechnology and advanced materials. It also establishes a new Defence Industrial Roadmap to foster closer military and industrial cooperation between the two nations.
“This isn’t merely paving the way for economic partnership but is also a blueprint for our shared prosperity,” Modi said through a translator, describing the UK and India as “natural partners” in facing global challenges.
The strategic partnership encompasses commitments to tackle illegal migration and organised crime through enhanced intelligence sharing and cooperation on criminal records. This represents a significant development in bilateral security cooperation.
Labour’s Diplomatic Victory
The successful conclusion of negotiations marks a significant diplomatic achievement for Starmer’s Labour government, which has been in power for just over a year. The Prime Minister was keen to highlight the contrast with his Conservative predecessors.
The UK has been negotiating a deal like this for many years, but it is this Government that got it done,” Starmer stated. With it, we’re sending a very powerful message that Britain is open for business, and that is already generating huge confidence.
The negotiations had begun more than three years ago under the previous Conservative government but had repeatedly stalled. Labour’s ability to finalise the agreement within their first year in office represents a notable foreign policy success.
Business Secretary Jonathan Reynolds emphasised the strategic importance: “India is one of the fastest-growing global economies and a rising economic superpower. This historic deal places the UK in a strong position to work alongside India over the next decade.
Climate and Clean Energy Partnership
A transformative element of the Vision 2035 agreement is the comprehensive climate partnership, which aims to accelerate clean energy adoption and mobilise climate finance at scale. Both nations have committed to strengthening cooperation through initiatives including the International Solar Alliance and the Coalition for Disaster Resilient Infrastructure.
The partnership will support trade and investment in green goods and services, increase green manufacturing, and work towards reforming global financial systems to enable scaling up of affordable finance for climate action in developing countries.
Foreign Secretary David Lammy, speaking ahead of the signing, said the agreement would “mark a step-change in bilateral ties for the next decade,” adding that it builds on the FTA to “unlock new opportunities that strengthen defence cooperation and drive innovation between both economies.
Education and Skills Development
The Vision 2035 includes an ambitious education and skills partnership designed to nurture the next generation of global talent. This involves deepening transnational education collaborations between UK and Indian universities, including plans for leading institutions to establish campuses in each other’s countries.
The framework recognises that people-to-people relations form “the golden thread of the India-UK partnership” and aims to strengthen cultural exchanges while adapting to rapid technological advancement.
Technology Security Initiative
Marking exactly one year since the countries signed the UK-India Technology Security Initiative, the prime ministers committed to further strengthening national security by harnessing frontier technologies. The initiative focuses on future telecommunications, artificial intelligence and critical minerals, laying groundwork for collaboration on semiconductors and other advanced technologies.
The nearly £6 billion in new investments and export agreements announced represent “just the beginning,” according to Reynolds, with collaboration extending into advanced technologies, critical minerals and green finance sectors.
Historic Context and Future Prospects
Speaking at the signing ceremony, Modi reflected on the shared history between the two nations, using a cricket metaphor to describe the partnership: “There may be a swing and a miss at times, but we always play with a straight bat. We are committed to building a high-scoring, solid partnership.”
The deal is forecast to boost bilateral trade by £25.5 billion annually and represents both India’s most comprehensive trade agreement to date and the UK’s most economically significant bilateral deal since Brexit. By 2030, the agreement aims to double bilateral trade between the world’s fifth and sixth-largest economies.
Amarjit Singh, Founder and CEO of the India Business Group, described the agreement as heralding “the dawn of a new golden era in the relationship between these two vibrant nations,” adding that it “transcends traditional notions of trade” and “embodies a collaborative effort to shape a sustainable and prosperous future together.”
Implementation and Next Steps
With the deal now signed, attention turns to implementation. The agreement includes numerous mechanisms ensuring that if India offers better terms to other countries in future, the UK will benefit from similar arrangements, protecting British interests as India’s economy continues its rapid growth.
India’s middle class is projected to reach 60 million by 2030 and potentially a quarter of a billion by 2050, representing an enormous market for British goods and services. The deal addresses longstanding challenges for UK businesses, including India’s position as having the highest average tariffs of any G20 economy.
As both leaders concluded their meeting at Chequers, the message was clear: this agreement represents not just a trade deal but a comprehensive partnership designed to shape both nations’ prosperity and security for the decade ahead.
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