Bolstering economic and security cooperation will be a common thread linking Prime Minister Narendra Modi’s visits to Britain and the Maldives beginning on Wednesday, with the formal signing of a free trade agreement (FTA) set to be the highlight of the trip to the UK.
Modi will first travel to the UK during July 23-24 for meetings with Prime Minister Keir Starmer and King Charles III, and then to the Maldives during July 25-26 to be the guest of honour at the Indian Ocean archipelago’s Independence Day celebrations. Both visits are opportunities to strengthen ties in a wide range of areas, especially trade, investment, defence and security, foreign secretary Vikram Misri told a media briefing on Tuesday.
Starmer is expected to host Modi at Chequers, the country residence of the British prime minister located 50 km northwest of London, people familiar with the matter said. The commerce ministers of the two sides – Piyush Goyal and Jonathan Reynolds – are expected to sign the FTA that was finalised on May 6, the people said on condition of anonymity.
The FTA is expected to increase two-way trade from the current level of almost $58 billion by $34 billion in the long run, according to a fact sheet from the UK. India will get tariff elimination on 99% of its tariff lines under the deal, covering nearly 100% of trade value.
The UK will get reduced tariffs on 90% of British tariff lines, including the cutting of levies on whisky, automobiles, lamb and medical devices. Labour-intensive sectors such as Indian textiles and apparel will get a competitive advantage against countries such as Bangladesh and Vietnam. Under the Double Contribution Convention, there will be an exemption for employers of Indian workers from paying social security contributions in the UK for three years, making it significantly easier to send workers on posting to Britain.
Misri said that since the FTA was announced by Modi and Starmer on May 6, the two sides have engaged in the legal scrubbing of the deal. “Last-minute work on that is continuing,” he said.
The UK is the sixth largest investor in India, with cumulative investments of $36 billion. India’s investments in the UK are close to $20 billion, and some 1,000 Indian companies operating in Britain provide employment to almost 100,000 people and have cumulative revenues of $91 billion.
Technology, research, innovation and education have emerged as other key pillars of India-UK cooperation and the prime ministers will review cooperation in these fields, Misri said. The India-UK Technology Security Initiative, finalised last year, has driven collaboration in telecom, critical minerals, AI, biotechnology, semiconductors and quantum computing.
Following the University of Southampton opening a campus in Gurugram last week, thus becoming the first foreign varsity to set up a campus under India’s new education policy, several other British institutions are considering establishing campuses in the country.
The British side perceives the FTA, finalised three years after negotiations began in January 2022, as part of a wider political reset and building on the bilateral road map 2030. The British side also expects the trade deal to lead to a wider relationship of trust between the two sides and to drive collaboration in key areas such as defence, especially with India set to spend a significant amount on its armed forces in the coming years.
The British side is understood to have put in place extensive security arrangements to avert any attempt by pro-Khalistan elements to disrupt the visit or organise protests, including the sensitisation of security agencies to Indian concerns. Both sides are keen to avoid a repeat of an incident in March, when a pro-Khalistan protester breached the security of external affairs minister S Jaishankar in London and got close to his vehicle.
Misri told the briefing that the presence of Khalistani extremists in the UK should be a matter of concern to the British side as such elements impact “social cohesion and social order” in that country.
Modi will travel from the UK to the Maldives, where he will be the first foreign head of government to be hosted by President Mohamed Muizzu. Modi’s presence as guest of honour at the Maldivian Independence Day celebrations will mark a significant turnaround in bilateral ties that turned frosty because of the policies of Muizzu, who came to power on the back of an “India Out” campaign in late 2023.
Misri attributed the turnaround in ties to India’s working hard on the relationship. “There will always be events that will impact or try to intrude on the relationship. But I think this is testimony to the kind of attention that has been paid to the relationship, including attention at the highest levels…We’ve continued to work at it, and I think the result is there for you to see,” he said.
The Maldives is a “very important partner” in India’s Neighborhood First policy MAHASAGAR (Mutual and Holistic Advancement for Security and Growth Across Regions) vision, Misri said. “We have always been the first on hand to respond to the needs of Maldives in times whenever it has faced crises…There has been a robust political relationship…bolstered by regular visits at high levels,” he said.
The joint vision for a comprehensive economic and maritime security partnership adopted during Muizzu’s visit to India last October 2024 has become the “guiding framework” for ties, and India is one of the largest trade partners of the Maldives, with two-way trade worth almost $500 million. Both sides are engaged in discussions for an FTA and an investment treaty and new areas of cooperation include renewable energy and fisheries.
India is executing several development projects in the Maldives through a mix of concessional lines of credit and buyer’s credit facilities, with the flagship project being the Greater Malé Connectivity Project, which will connect four islands.
Misri said the Maldives has almost completely drawn a currency swap arrangement for $400 million provided as emergency financial assistance and is set to draw upon another currency swap arrangement of ₹30 billion. The State Bank of India has also continued to re-subscribe to Maldives treasury bills.
The two sides also have robust defence and security cooperation, including naval exercises, and India continues to assist the Maldives by training its defence personnel. “We’ve been helping the Maldives enhance its capacity for EEZ surveillance and maritime domain awareness through the provision of ships and assets,” he said.