Modi to Visit UK to Sign Free Trade Agreement, Discuss Trade and Security with Starmer

Indian Prime Minister Narendra Modi is set to embark on a two-day state visit to the United Kingdom starting Wednesday, July 23, 2025, to sign a landmark Free Trade Agreement (FTA) with the UK. This will mark Modi’s fourth visit to the UK as prime minister, during which he will engage in comprehensive discussions with British Prime Minister Keir Starmer on trade, defense, technological cooperation, and security

According to The Guardian, the agreement comes amid global economic uncertainty driven by US President Donald Trump’s tariff policies, positioning it as a significant political and economic achievement for both nations.

A statement from the Indian government highlighted that Modi will hold wide-ranging talks with Starmer and meet King Charles III during the visit. Analysts view this FTA as one of the UK’s most significant economic agreements since its exit from the European Union, while for India, it represents the first major free trade deal outside Asia. Indian economist Sanjaya Baru emphasized the historical ties between the two nations, underscoring the need to deepen commercial relations. The FTA negotiations have secured concessions for India, including work visas for Indian citizens temporarily employed in the UK, recognition of professional qualifications, and exemptions from national insurance contributions. However, the agreement requires ratification by both countries’ parliaments and is expected to take effect by mid-2026. Under the FTA, 99% of Indian exports, including gems, textiles, engineering goods, leather, garments, and processed foods, will gain duty-free access to the UK market. In return, India will phase in tariff reductions on 90% of British exports. Tariffs on Scotch whisky will be immediately halved from 150% to 75%, further reducing to 40% within a decade. British cars, previously subject to over 100% tariffs, will face a reduced 10% duty under a quota system. Additional benefits include tariff exemptions on medical equipment, pharmaceuticals, aircraft parts, and electronics. However, the agreement excludes India’s agricultural sector, financial services, and legal services, as discussions on a bilateral investment treaty remain unresolved. The UK’s proposed Carbon Border Adjustment Mechanism (CBAM) is also excluded from the deal. Ajay Srivastava, head of the Delhi-based Global Trade Research Initiative, noted that the carbon tax remains a significant hurdle, potentially undermining the FTA’s benefits for Indian exporters.

The FTA is expected to double bilateral trade to $120 billion by 2030, boosting sectors like textiles, marine products, and engineering goods for India, while facilitating British exports of whisky, cars, and food items like lamb and salmon. Modi’s visit will also include discussions with business leaders to strengthen economic ties.