Cabinet approves India-UK free trade agreement: Sources

The cabinet on Tuesday approved the free trade agreement between India and the UK, which will be signed in London on July 24, sources said.

The pact, officially called as comprehensive economic and trade agreement, will be signed during Prime Minister Narendra Modi's visit to London.

Modi's four-day visit to the United Kingdom and the Maldives begins Wednesday.


Commerce and Industry Minister Piyush Goyal will accompany the prime minister.

The two countries announced the conclusion of the negotiations for the trade agreement on May 6.

The trade pact proposes to remove taxes on the export of labour-intensive products such as leather, footwear and clothing, while making imports of whisky and cars from Britain cheaper, in a bid to double trade between the two economies to USD 120 billion by 2030.

The pact has chapters on issues including goods, services, innovation, government procurement, and intellectual property rights.

The text of the agreement is generally signed by the commerce ministers from both countries.

Once the free trade agreement is signed, it will require approval from the British Parliament before it can take effect.

The two countries have also concluded the negotiations for the Double Contribution Convention Agreement, or social security pact. It would help avoid double contribution to social security funds by Indian professionals working for a limited period in Britain.

However, the talks for the bilateral investment treaty (BIT) are still going on.

The FTA comes into force after signing and ratification by both the countries.

In such trade agreements, two countries either eliminate or significantly reduce customs duties on maximum goods traded between them. They also ease norms for promoting trade in services and bilateral investments.

India's exports to the UK rose by 12.6 per cent to USD 14.5 billion, while imports grew by 2.3 per cent to USD 8.6 billion in 2024-25.

The bilateral trade between India and the UK increased to USD 21.34 billion in 2023-24 from USD 20.36 billion in 2022-23.