India and the United Kingdom have successfully concluded a free trade agreement (FTA) and a double contribution convention, statements issued by the respective governments said on Wednesday, May 7.
The agreement was finalised after three years of negotiations.
“Today we have agreed a landmark deal with India - one of the fastest growing economies in the world, which will grow the economy and deliver for British people and business,” British Prime Minister Keir Starmer said in a statement.
“In a historic milestone, India and the UK have successfully concluded an ambitious and mutually beneficial free trade agreement, along with a double contribution convention,” India’s Prime Minister, Narendra Modi, said in a separate statement.
The UK government said the agreement is expected to increase bilateral trade by £25.5 billion ($34 billion). Trade between the two nations stood at £42.6 billion in 2024, up 8.3 percent from the previous year.
At the end of 2024, the UK had a £8.4 billion trade deficit with India across goods and services. The South Asian nation was the country’s 11th-largest trading partner.
The Indian government said the UK will remove all tariffs on 99.1 percent of imports as soon as the agreement comes into force.
From India’s side, it has agreed to slash tariffs on 90 percent of tariff lines from the UK, with 85 percent of these set to become zero tariff within a decade.
In addition, New Delhi said Indian employees working in the UK temporarily will be exempt from paying national insurance for up to three years, under the “double contribution convention”.
The Indian government expects the deal to double the bilateral trade between the two countries, currently at about $60 billion, by 2030.
The double contribution convention signed between the two countries includes a provision wherein such Indian workers and their employers will be exempt from paying social security contributions in the UK for a period of three years.