India-UK trade deal to boost telecom, emerging tech, innovation

Indian Prime Minister Narendra Modi and United Kingdom Prime Minister Keir Starmer have jointly announced the successful finalization of the India–U.K. Free Trade Agreement (FTA) for reducing costs and simplifying the exchange of goods and services between the two countries. The agreement is designed to lower barriers to digital trade, foster innovation, and promote the development of emerging technologies. The agreement aligns with India’s Viksit Bharat 2047 vision of becoming a developed nation and supports both countries’ broader economic growth ambitions.

Described as a “historic and ambitious deal to boost jobs, exports, and national growth,” the FTA is expected to significantly enhance trade in services, including IT services, financial technology (fintech), and professional and business services. The agreement will also strengthen collaboration between the U.K. and India on emerging technologies in key sectors such as agriculture, advanced manufacturing, healthcare, and clean energy.

It will open up greater access to the Indian market for several U.K. service sectors, including telecommunications and construction. This increased access will give U.K. services firms—who already export over £500 billion ($662 billion) globally—the confidence and clarity needed to expand into India and tap into its fast-growing economy.

“Delighted to speak with my friend PM Keir Starmer. In a historic milestone, India and the U.K. have successfully concluded an ambitious and mutually beneficial Free Trade Agreement, along with a Double Contribution Convention,” Modi said on X.

“These landmark agreements will further deepen our Comprehensive Strategic Partnership, and catalyse trade, investment, growth, job creation, and innovation in both our economies. I look forward to welcoming PM Starmer to India soon,” Modi added.

The legal text of the deal is still being finalized. Once it is complete and legally checked, the agreement will be signed. After both countries complete their approval processes, including U.K. parliamentary procedures, the deal will officially become effective.

The foundation of the U.K.-India relationship is multifaceted, with deep historical, cultural, and economic ties. A key element of this connection is the vibrant Indian diaspora in the U.K.—at least 1.9 million people of Indian origin—who contribute significantly to the U.K.’s social fabric and economic dynamism. This “living bridge” continues to enhance collaboration across various sectors.

“Our landmark agreement with India is the largest ever trade deal secured by the U.K.,” said Jonathan Reynolds, U.K.’s trade secretary.

“This deal will help deliver our Plan for Change, putting more money in working people’s pockets, boosting our economy and bolstering British business,” Reynolds added.

As part of the FTA, the U.K. and India have also agreed to start talks on a reciprocal social security arrangement called the Double Contribution Convention (DCC). This will make it easier for businesses and workers by ensuring that employees moving between the U.K. and India only need to pay social security contributions in one country at a time.

In a statement, the British government said that under the DCC, workers temporarily posted in the other country for up to three years can keep paying into their home country’s system, helping protect their social security record. Like the U.K.’s agreements with countries like Canada, Japan, and EU members, the DCC won’t affect people’s access to benefits where they pay contributions or change the need to pay the U.K.’s immigration health surcharge. It will come into effect alongside the trade deal.

For India, a three-year exemption under the DCC would allow Indian workers temporarily in the U.K.—and their employers—to avoid paying U.K. social security contributions. This move will enhance the competitiveness of Indian service providers in the U.K. market.

“The India-U.K. FTA, along with a Double Contribution Convention, is a bold, future-ready step that will unlock growth, jobs, and innovation—accelerating our journey towards Viksit Bharat 2047. A true reflection of India’s rising global economic stature,” Piyush Goyal, India’s minister of commerce and industry, said on X.

The FTA comes against the backdrop of strengthening economic ties between India and the U.K., with bilateral trade currently around $60 billion and expected to double by 2030, India’s Ministry of Commerce & Industry said in a statement.

This future-oriented agreement results from extensive negotiations to boost trade and investment across goods, services, and technology sectors. It seeks to foster sustainable and inclusive economic growth, strengthen supply chain resilience, and create high-quality jobs in India.

“This agreement sets a new benchmark for equitable and ambitious trade between two large economies. It will benefit Indian farmers, fishermen, workers, MSMEs, startups and innovators. It brings us closer to our goal of becoming a global economic powerhouse,” Goyal said.

“This FTA is not only about goods and services, but also about people, possibilities and prosperity. It protects our core interests while opening doors to India’s greater participation in global value chains,” Goyal added.

The agreement is set to create major opportunities for talented and skilled Indian youth in the U.K., a global hub for digitally delivered services, thanks to its strong financial, professional services sectors, and advanced digital infrastructure. India has secured key commitments for its service providers, particularly in areas like architecture, engineering, IT services, and telecommunications, enhancing access to the U.K. market, the statement said.

The U.K. government described the agreement as an “ambitious and comprehensive deal,” projecting that it will boost the U.K.’s GDP (gross domestic product) by £4.8 billion ($6.3 billion) and increase U.K. wages by £2.2 billion ($2.9 billion) annually over the long term. Bilateral trade between the U.K. and India is also expected to grow by £25.5 billion ($33.7 billion) annually in the long run.

Lowering barriers to digital trade

“This FTA will help to drive growth through the openness and stability of digital markets and reverse the trend of increased digital trade restrictiveness,” the statement added.

The agreement is expected to give U.K. businesses greater confidence to expand into India by making trade cheaper, faster, and easier for both companies and consumers. It will cut red tape, especially for SMEs, through measures supporting electronic contracts and transactions. The deal is also expected to boost innovation and emerging technologies through deeper U.K.-India collaboration.

The British government said that U.K. businesses will be protected from being forced to share their source code, enabling them to enter the Indian market with more security. The agreement also includes strong protections for online consumers, such as reducing spam by requiring consent or identifying the sender. These measures aim to make digital spaces safer and more trustworthy.

Additionally, the deal covers cross-border data flows and data localization, allowing the British government to negotiate data rules with India as it does with other trade partners. These commitments will not compromise the U.K.’s strong data protection standards—personal data will continue to be protected under U.K. law, according to the statement.

FTA to boost financial services

The India–U.K. Free Trade Agreement (FTA) will take key steps to foster innovation in financial services across both countries. It will include non-discrimination provisions to ensure U.K. firms are treated fairly when offering services in the Indian market. The agreement also features strong transparency commitments, ensuring that India’s rules for authorising U.K. financial services firms are clear, fair, and applied reasonably and impartially.

“We have jointly recognised the importance of developing an efficient, safe and secure environment for cross-border electronic payments. The deal will commit the U.K. and India to cooperate on issues such as FinTech and diversity in finance, alongside promoting financial stability, and improving market integration,” the British government said.

The agreement will strengthen support for innovation in both the U.K. and India by creating new opportunities for innovation-driven industries and encouraging trade of cutting-edge products and services. The U.K. and India already share a strong research and innovation partnership, and the FTA will build on that foundation to promote economic growth and address global challenges.

As part of the deal, an Innovation Working Group will be established to deepen cooperation in areas such as regulatory approaches, the commercialization of emerging technologies, and strengthening supply chains. This platform will bring together government, industry, academia, and civil society to discuss innovation-related challenges, advise on policy, and support early identification and resolution of barriers to trade—especially those linked to new technologies. It will help ensure that businesses in both countries can fully realise their global innovation and trade potential.

“We will work with India to achieve the early identification and mutually beneficial resolution of unintended barriers to trade, including by monitoring regulatory frameworks for new technologies, supporting businesses to maximise their global trading ambitions,” the U.K. government said.

UK-India pact to boost telecom ties

Recognizing the growing importance of U.K.-India telecom trade, the agreement also promotes ongoing cooperation in the sector. This includes collaboration on shared challenges and opportunities, advancing international standards, and engaging in joint discussions on network security, diversification, and international mobile roaming.

The agreement is expected to establish a robust set of trade rules to ensure fair and competitive access for service providers in the U.K. and Indian telecommunications markets. It would support the expansion of U.K. telecom companies into India, contributing to U.K.’s economic growth.

The British government said that the U.K. telecom providers would have access to essential facilities and services in India on a transparent, fair, and non-discriminatory basis. The agreement is also expected to ensure access to telecom networks and services, and mandate that key resources such as spectrum and radio frequencies, critical for mobile and internet connectivity, are allocated openly and objectively.

In addition to opening new markets for U.K. goods and services, the FTA agreement is expected to make it easier for U.K. businesses to trade with and within India. Key measures include faster customs processing, fewer technical barriers to trade, mutual recognition of digital systems and paperless processes, and firm commitments to standards in areas like sanitary and phytosanitary (SPS) measures. These steps will likely enhance trade efficiency while maintaining U.K. standards and offering greater certainty for exporters. This would be especially valuable for SMEs, which often face high fixed costs and regulatory complexity when entering new markets. The deal also includes tailored support for SMEs, such as dedicated contact points, to help them successfully navigate and grow in the Indian market.

India rises as key UK trade partner

Despite India’s traditionally high trade barriers, the strength of the India-U.K. economic relationship is evident. In 2024, India was the U.K.’s 12th largest trading partner, with total trade between the two countries reaching £43 billion ($56 billion), the British government said in the statement. This underlines India’s growing significance to U.K. exporters and investors.

India itself is undergoing rapid transformation. As the fastest-growing economy in the G20, with growth expected to remain above 6% annually for at least the next five years, it represents a major global economic force. Having overtaken other nations to become the world’s fifth-largest economy, India is projected to climb to third place by 2028. Its expanding market and innovation-driven growth make it a vital partner for the U.K. in the years ahead.

“All this growth presents significant opportunity for U.K. businesses. As India grows, so will the number of consumers looking to purchase high-quality U.K. goods and services,” the British government added.

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