tl;dr
India and the United Kingdom have finalized a landmark trade deal that lowers tariffs on Indian goods imported to the U.K. and cuts Indian tariffs on U.K. goods from 15% to 3%. The agreement enhances cooperation in research, innovation, and emerging industries such as AI, quantum computing, and biot...
India and the United Kingdom have finalized a landmark trade deal, reinforcing their economic and technological ties. The agreement, which significantly lowers tariffs on Indian goods imported to the U.K., builds on an existing Comprehensive and Strategic Partnership. This pact enhances cooperation in research, innovation, and emerging industries such as AI, quantum computing, and biotechnology. Already, nearly £6 billion ($7.9 billion) in new investments and export agreements between Indian and British companies promise to create over 2,200 new U.K. jobs.
The trade deal cuts India’s average tariff on U.K. goods from 15% to 3%, opening Indian markets for British exporters amid global trade challenges. British Prime Minister Keir Starmer hailed the deal as a catalyst for job creation and economic growth, projecting a £4.8 billion ($6.5 billion) annual boost to the U.K.’s GDP. For India, this is its first major trade pact in over a decade, aligning with Prime Minister Narendra Modi’s strategy to position India as a key manufacturing hub and improve global supply chain integration.
Building on this momentum, the leaders of India and the U.K. unveiled the “India-U.K. Vision 2035,” targeting long-term collaboration that advances technology, security, and sustainability. The vision promotes innovation in telecoms, AI, semiconductors, biotechnology, quantum tech, and advanced materials, while calling for reforms in global institutions such as the United Nations and WTO to address contemporary challenges effectively.
The agreement also fast-tracks a Bilateral Investment Treaty and enhances cooperation in financial services innovation, green finance, and asset management. Joint initiatives include scaling Digital Public Infrastructure and digital governance as models for global collaboration. The U.K.-India Research & Innovation Corridor will be expanded to connect talent and accelerate commercialization of technologies across sectors.
Both countries aim to boost deep-tech ventures by establishing a U.K.-India Joint Centre for AI, focusing on trustworthy AI applications, and by advancing secure telecommunications, including 6G development and cyber resilience. Cooperation will extend to space innovation and exploration, linking Indian and U.K. space sectors for joint research and commercial projects.
The trade deal has already spurred new business: 26 British companies secured contracts in India, sustaining hundreds of jobs, while 18 companies confirmed fresh investments. Notable examples include Zerowatt Energy’s £10 million ($13.2 million) headquarters in Leicester, DCube AI’s £5 million ($6.6 million) U.K. expansion, and Aurionpro’s £20 million ($26.5 million) investment to open U.K. headquarters with AI-powered R&D labs. Techvantage Systems plans a £10 million ($13.2 million) expansion in London focused on AI for financial services, generating 50 new jobs.
U.K. Business and Trade Secretary Jonathan Reynolds emphasized that the billions flowing from the trade deal will benefit all regions across the U.K., underpinning its appeal as a prime destination for investment and business. This historic partnership not only boosts economic growth but also cements India and the U.K. as key players in the global innovation economy moving forward.