Ahead of Prime Minister Narendra Modi’s visit to the UK this week, where he is expected to formally sign the Free Trade Agreement (FTA) with his counterpart Keir Starmer, the Cabinet on Tuesday approved the deal.

While the deal was announced on May 6, the text of the agreement was due to be released as legal scrubbing was ongoing.

The formal signing is expected on June 24 in the UK, where PM Modi will be accompanied by Commerce Minister Piyush Goyal.

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The Cabinet decision, PTI reported, comes ahead of Modi’s four-day visit to the United Kingdom and the Maldives from Wednesday. However, the agreement will come into effect only after it is also passed by the British Parliament.

The signing of the deal comes after a period of significant political turmoil in the UK over the past three years, during which London saw three different Prime Ministers. The deal was finally announced after the Starmer-led Labour Party secured a landslide election victory.

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For India, the UK deal is the first major trade agreement with a Western country since New Delhi decided to quit negotiations to enter the China-led Regional Comprehensive Economic Partnership (RCEP) in 2019.

While the agreement is expected to open the UK market for Indian textile and leather products, the deal text will reveal how India addressed the looming concern over the Carbon Border Adjustment Mechanism (CBAM), which is expected to significantly impact India’s metal exports to the UK.

The UK deal assumes significance as it marks the beginning of integration between the advanced services sector in the UK and that of India.

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India has also opened its doors to high-end British cars and whisky, albeit in a phased manner.

The India–UK Free Trade Agreement (FTA) ensures comprehensive market access for goods across all sectors, covering all of India’s export interests. India will gain from tariff elimination on approximately 99 per cent of tariff lines, covering nearly 100 per cent of trade value — offering opportunities to boost bilateral trade between India and the UK, the Commerce and Industry Ministry said.

The pact includes chapters on goods, services, innovation, government procurement, and intellectual property rights. The two countries have also concluded negotiations on the Double Contribution Convention Agreement, or social security pact.

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It would help avoid double contributions to social security funds by Indian professionals working for a limited period in Britain.

However, talks on the Bilateral Investment Treaty (BIT) are still ongoing.

Government officials have pointed out that the India-UK trade deal is also significant as it is one of the most comprehensive free trade agreements that India has entered into so far and could serve as a template for future engagements, including the multiple trade deals currently under negotiation — such as the complex agreement with the European Union.

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The Ministry had said that the UK FTA will ease mobility for professionals, including contractual service suppliers; business visitors; investors; intra-corporate transferees; partners and dependent children of intra-corporate transferees with the right to work; and independent professionals such as yoga instructors, musicians and chefs.

India’s exports to the UK rose by 12.6 per cent to $14.5 billion, while imports grew by 2.3 per cent to $8.6 billion in 2024–25. Bilateral trade between India and the UK increased to $21.34 billion in 2023–24 from $20.36 billion in 2022–23.