India-UK Relations Hit New High With Landmark Free Trade Agreement in 2025
Bilateral ties evolve amid deals and diaspora shifts.
In a year of transformative developments, India-UK relations achieved a landmark breakthrough with the signing of the long-awaited Free Trade Agreement (FTA) during Prime Minister Narendra Modi's July visit to the UK. Hosted warmly by British Prime Minister Keir Starmer at Chequers, the leaders sealed the deal over discussions, with Starmer accepting an invitation for a major trade delegation to India in October, projecting bilateral trade growth exceeding 25 billion pounds from the current 44.1 billion pounds upon ratification in early 2026.
Complementing the FTA, the India-UK Vision 2035 roadmap emerged as a comprehensive 10-year strategy encompassing innovation, defence, education, and climate cooperation. Higher education ties strengthened notably, with nine British universities advancing plans for campuses in India, offering alternatives amid the UK's stringent immigration policies that saw approximately 45,000 Indian students and 22,000 professionals departing, alongside extended residency waits to 10 years.
Economic pressures prompted outflows of affluent individuals, including steel tycoon Lakshmi N Mittal relocating to lower-tax jurisdictions like Dubai, following the abolition of non-dom status under Chancellor Rachel Reeves. The Indian diaspora mourned the loss of influential figures such as hotelier Joginder Sanger, Hinduja Group co-chairman G P Hinduja, Lord Swraj Paul, and Lord Meghnad Desai, whose legacies in business and philanthropy underscored enduring people-to-people connections.
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Shared crises fostered solidarity, from the UK's condolences for the Delhi car blast and support after the Pahalgam attack and Operation Sindoor, to a joint 'Human Cost of Terrorism' exhibition in London. The tragic Air India crash from Ahmedabad in June, claiming 241 lives including 53 British nationals, highlighted diaspora vulnerabilities, with sole survivor Vishwas Kumar Ramesh addressing his trauma upon returning to Leicester.
Legal and security dimensions persisted, with ongoing extradition battles for fugitives like Vijay Mallya and Nirav Modi, alongside UK sanctions on a Sikh businessman linked to Babbar Khalsa funding. Overall, 2025 encapsulated a multifaceted partnership balancing economic aspirations with migration challenges and collective responses to adversity.
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