Indian Prime Minister Narendra Modi is currently in the United Kingdom to formalize a significant free trade agreement expected to reshape economic ties between the two nations. If this visit goes ahead, it will be Modi’s fourth trip to the UK since coming to power in 2014. The agreement is designed to reduce tariffs on numerous goods and services, improve market access and create overall economic growth for both nations.
The UK government estimates that this bilateral trade agreement will pump £4.8 billion a year into the UK economy. In return, Indian manufacturers will have much wider access to the social and economic benefits of the UK market. That’s particularly the case for the electric and hybrid vehicle markets. After months of negotiations, this cleared the way for the deal to be approved by the Indian cabinet, which authorized the plan earlier this week.
Modi is expected to hold talks with UK Prime Minister Sir Keir Starmer during his short visit. He will have the opportunity to meet with King Charles as well. Sir Keir Starmer has emphasized the significance of this deal, calling it a “landmark” agreement that will “create thousands of British jobs across the UK, unlock new opportunities for businesses and drive growth.”
While producing thousands of new jobs in the UK, the trade treaty will promote India’s growth and prosperity. Britain wants India to promise to reduce tariffs on British imports, including popular items like whisky, gin and cars. The UK is projected to import a great deal more textiles, gemstones and jewelry, and other products from India. This mutual agreement is expected to increase bilateral trade by a further £25.5 billion a year by 2040.
Modi expressed optimism about the deal’s potential impact, stating it would help “catalyse trade, investment, growth, job creation, and innovation in both our economies.” He had hailed the deal at the time as a historic breakthrough that was “ambitious and mutually beneficial.”
Both nations are celebrating this milestone. Before that deal can come into force, it must be approved by the UK Parliament, where it will take at least a year to enter into effect.