Modi’s UK Trip to Seal Major India-UK Trade Deal Covering Whisky, Cars, EVs, Textiles

During Prime Minister Narendra Modi’s visit to the United Kingdom, a major highlight will be the signing of a long-awaited free trade agreement (FTA) between the two nations.

The pact, negotiations for which concluded in May after nearly three years of intermittent talks, is expected to boost trade in sectors ranging from whisky and cars to electric vehicles and textiles.

According to reports, India’s Cabinet has already approved the deal. The UK Parliament is expected to give its nod within the next year.

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India-UK Trade: A Snapshot

• Bilateral trade stands at over $50 billion.

• The UK is India’s sixth-largest foreign investor.

• Nearly 1,000 Indian companies operate in the UK, employing more than 100,000 people and investing close to $20 billion, according to Foreign Secretary Vikram Misri.

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What the India-UK Trade Deal Offers

🔹 Export Boost for India:
India’s commerce ministry said 99% of Indian exports to the UK will benefit from zero-duty access, covering goods like textiles, footwear, auto parts, gems, and jewellery. UK exports will see tariff reductions on 90% of goods.

🔹 Cars:
India will reduce import duties on UK-made cars from 100% to 10%, but only under a quota system. This is expected to benefit luxury brands like Aston Martin and Tata-owned Jaguar Land Rover.

🔹 Electric Vehicles:
Indian electric and hybrid vehicle makers, including Tata Motors and Mahindra Electric, will gain limited market access in the UK under a quota-based system.

🔹 Easier Visas and Social Security Relief:
The UK will ease visa norms for business visitors, chefs, yoga instructors, musicians, and service professionals. Temporary Indian workers in the UK will also be exempted from social security contributions for three years.

🔹 Textiles and Footwear:
Indian exporters like Welspun, Raymond, Arvind, and Vardhman will gain duty-free access. Footwear brands like Bata India and Relaxo are also expected to benefit.

🔹 Spirits:
Import duties on Scotch whisky will drop from 150% to 75% immediately, and gradually reduce to 40% over 10 years. This is a major gain for UK firms such as Diageo, maker of Johnnie Walker.

🔹 Government Procurement:
India will open select non-sensitive public tenders (up to ₹200 crore) to British firms, marking a significant step in procurement liberalisation.

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Diplomatic Significance

Former diplomat Mahesh Sachdev called the FTA the “seminal point” of Modi’s visit. Commerce Minister Piyush Goyal is accompanying the Prime Minister for the official signing ceremony.

This is PM Modi’s fourth visit to the UK since taking office in 2014. He is also scheduled to meet British Prime Minister Keir Starmer, with discussions set to cover trade, energy, education, healthcare, and security, along with meetings with business leaders.

“The UK is an important market for Indian exporters,” said Ajay Sahai, head of the Federation of Indian Export Organisations. The FTA, he added, will open doors for Indian sectors such as marine, engineering, textiles, and footwear.