As the two leaders met on the sidelines of the summit, Modi could be heard telling Starmer, “We did it.” Starmer replied, “We did it. Yes, yes, yes, I hear. We got it over the line. So this is good.”
While neither leader explicitly mentioned the subject of their conversation, the exchange raised expectations that India and the UK may have resolved issues that have delayed the rollout of their free trade agreement signed last year.
The trade pact has faced hurdles in recent months. India initially attributed delays to Britain’s parliamentary procedures. More recently, Indian officials indicated that disagreements over the UK’s new steel safeguard measures had become a sticking point.
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According to Bloomberg, India had warned that it could reconsider some concessions granted under the free trade agreement after Britain moved to sharply reduce tariff-free steel import quotas through new safeguard measures.
The recorded conversation provided further clues about a possible agreement. After the initial exchange, an Indian aide asked, “how will we announce it today?” Starmer responded, “I think we put a statement out.” He then added, “or we could do something more,” before asking, “should I ask our teams how we should do this?”Modi and Starmer later held a bilateral meeting on the sidelines of the G7 summit in Evian on Tuesday. Official statements released by both governments did not mention the steel dispute.
However, the Indian government’s statement said, “The leaders looked forward to the early entry into force of the comprehensive economic and trade agreement.”
The remarks suggest both sides may be closer to resolving outstanding issues and moving ahead with the implementation of the trade deal.
What does the India-UK trade deal include?
The India-UK free trade agreement, signed by both countries last year, is India’s biggest trade pact in a decade and Britain’s largest trade deal since leaving the European Union. The agreement was concluded in May after more than three years of negotiations covering issues such as tariffs, visas and tax-related provisions.
Under the deal, India will reduce tariffs on about 90% of tariff lines for British exports. Around 85% of those products will become completely tariff-free within 10 years. Britain, meanwhile, will lower duties on about 99% of tariff lines for goods exported from India, providing wider access for sectors including textiles, jewellery, agricultural products and engineering goods.
The agreement includes significant tariff reductions on key British exports. Import duties on whisky and gin will be cut to 75% initially before falling to 40% by the tenth year of the pact. Tariffs on automobiles will be reduced to 10%, subject to quotas, from the current level of more than 100% over the same period.
According to both governments, the deal is expected to increase bilateral trade and investment flows between the two countries. Two-way trade stood at $21.9 billion in 2024, and the agreement is projected to add £25.5 billion a year to bilateral trade over the long term.
Alongside the trade pact, India and the UK also unveiled a broader Vision 2035 partnership framework covering cooperation in defence, migration, technology, climate, education and healthcare. The two countries said they would work together in areas including advanced manufacturing, electric propulsion and jet engine technologies.