NEW DELHI/LONDON: India and the United Kingdom will sign a comprehensive free trade agreement on July 24 during Prime Minister Narendra Modi's visit to Britain, officials confirmed. Under the deal, India will ease tariffs on key British exports such as Scotch whisky, cars, and selected food items, while the UK will offer duty-free access to a wide range of Indian goods, including textiles and electric vehicles.

The agreement, finalized in May after nearly three years of intermittent negotiations, is expected to significantly increase bilateral trade by removing various trade barriers and expanding market access for both sides. It will come into force following ratification by the British Parliament and approval from India's federal cabinet, a process expected to be completed within the following year.

"This is a significant agreement," India's Foreign Secretary Vikram Misri told reporters on July 22, noting that legal vetting of the pact was nearly complete ahead of Modi's four-day visit to the UK and Maldives. India's Commerce and Industry Minister Piyush Goyal will accompany the Prime Minister for the formal signing ceremony, a senior official from the Commerce Ministry said.

This will mark Modi's fourth visit to the UK since assuming office in 2014. During the visit, he is expected to meet British Prime Minister Keir Starmer to discuss a range of issues, including trade, energy cooperation, regional security, health collaboration, and education partnerships. Modi will also hold high-level meetings with business leaders from both countries.

According to Foreign Secretary Misri, bilateral trade between India and the UK reached US$55 billion in the 2023–2024 fiscal year. He also noted that the UK has become India's sixth-largest investor, with cumulative foreign direct investment totaling nearly $36 billion. Additionally, approximately 1,000 Indian companies operate in the UK, collectively employing around 100,000 people and having invested almost $20 billion into the British economy.

As part of the trade agreement, India will immediately cut its 150 percent tariff on Scotch whisky to 75 percent, with further reductions bringing it down to 40 percent over the next ten years, according to the British government. India will lower its duties on automobiles from 100 percent to 10 percent under a quota system that will gradually be liberalised to allow greater access to British carmakers.

In exchange, Indian manufacturers will gain entry into the UK market for electric and hybrid vehicles under a similar quota-based arrangement, Commerce Ministry officials stated. The ministry also emphasized that the agreement will benefit 99 percent of Indian exports to the UK by eliminating tariffs, with Indian textile exports among the primary beneficiaries. On the British side, 90 percent of its tariff lines will see reductions or eliminations under the new framework.

The deal represents a milestone in India-UK economic ties and reflects broader efforts by both nations to deepen trade and investment linkages amid evolving global supply chains and geopolitical shifts.

"The UK is an important market for Indian exporters," said Ajay Sahai, director general of the Federation of Indian Export Organisations, adding that the trade pact will boost bilateral trade and provide access for Indian sectors such as textiles, footwear, marine and engineering products.