Starmer and Modi tie the knot on Free Trade Agreement

At the start of 2022, then Prime Minister Boris Johnson said he wanted a trade deal with India “done by Diwali”. After 14 rounds of negotiations, involving four Prime Ministers and spanning three years, Sir Keir Starmer welcomed his Indian counterpart, Narendra Modi, to his country retreat at Chequers on Thursday to sign a comprehensive Free Trade Agreement (FTA).

Much of the deal's detail is already known, as it was announced on 6 May, including criticism in the media that it would undercut British workers due to new terms regarding social security. However, these claims have been dismissed by the government, highlighting that no special measures were being granted to Indian workers in the UK.

Headlines that the government will be keen to promote include a slash in tariffs for UK exports from 15% to 3% on average, as well as significant concessions for the whisky, automotive, cosmetics, and aerospace sectors. The government estimates a £4.8 billion boost to GDP, a projected £25.5 billion increase in annual bilateral trade, a £2.2 billion rise in wages, £6 billion in new Indian investment in the UK, and over 2,000 new British jobs supported.

In return, 99% of India’s exports will enter the UK duty-free and gain access to the UK agricultural and marine sectors. It also underscores India’s position as a global manufacturing hub, with Modi describing it as “a historic agreement which opens a new era of trust, opportunity, and shared prosperity between India and the UK.” A sentiment echoed by Starmer, who said a trade deal was "not the extent or the limit of our collaboration with India", a country with which the UK has "unique bonds of history, of family and culture, and we want to strengthen our relationship further".

Today’s FTA signifies the UK’s largest bilateral deal since Brexit. It’s a deal that is perhaps more symbolic than it is economically significant, for now at least.

Much like the deal struck with US President Donald Trump, there are still plenty of topics to be elaborated on and discussed further. Starmer will meet the President at his golf course in Scotland this weekend, where he hopes to announce further details and measures regarding that FTA and demonstrate that his leadership and approach on the world stage are working for the British economy.