New Delhi: PM Modi has embarked on a two-day visit to the United Kingdom today (July 23). The high-profile visit is aimed at cementing the landmark Free Trade Agreement (FTA) between the two countries. The visit is expected to mark a significant moment in India-UK ties, with trade, investment, defence and technology at the core of the bilateral talks.
PM Modi will meet his British counterpart Keir Starmer and King Charles III during his visit. He is also likely to be hosted at Chequers, the Prime Minister’s official country residence near London. The two nations are expected to formally sign the long-negotiated FTA during this visit.
FTA expected to increase bilateral trade by $34bn
Commerce ministers Piyush Goyal and Jonathan Reynolds are expected to sign the agreement, which was finalised on May 6. The deal promises to significantly enhance bilateral trade, which currently stands at nearly $58 billion. According to UK estimates, the FTA could boost this figure by an additional $34 billion over time.
The agreement includes tariff eliminations for 99 per cent of India’s export lines, offering a considerable advantage to Indian sectors such as textiles and apparel. Meanwhile, the UK will benefit from reduced tariffs on 90 per cent of its export items, including key products like whisky, automobiles, and medical equipment.
New impetus for Indian professionals and businesses
The FTA will also support labour mobility under the Double Contribution Convention (DCC). This move will allow Indian companies to send employees to the UK without paying social security contributions for up to three years. It is a significant move as the exemption is expected to ease postings for Indian professionals in sectors like IT.
India is the second largest foreign investor in the UK, with 1,000 Indian companies operating there and employing around 1,00,000 people. On the other hand, the UK is the sixth largest investor in India, with cumulative investments totalling $36 billion.
Spotlight on AI, tech and education under India-UK Technology Security Initiative
Technology and research will also be key areas of focus during the visit. The two countries will review progress under the India-UK Technology Security Initiative, covering areas such as AI, biotechnology, semiconductors, quantum computing, and critical minerals.
In the education arena, the University of Southampton recently became the first British university to establish a campus in India under the new education policy. More UK-based educational institutions are now considering similar moves.
Managing security concerns rising from pro-Khalistan elements
Security arrangements around the visit have been strengthened. British authorities are taking steps to prevent disruptions by pro-Khalistan elements, following incidents earlier this year. Indian officials have urged the UK to treat the presence of such groups seriously, citing concerns over social cohesion.
The FTA, seen by the UK as part of a broader political reset, is expected to deepen strategic trust and open doors to greater collaboration in defence procurement and joint innovation projects.