UK-India Pact Heralds Billions in Clean Tech Investment and Cross-Border Innovation

UK Prime Minister Sir Keir Starmer welcomed Indian Prime Minister Narendra Modi to London today for the signing of a landmark trade agreement between the UK and India. The leaders also unveiled an ambitious new framework for bilateral ties, formally known as the UK-India Vision 2035.

Described as the most comprehensive trade deal India has ever entered into and the most economically significant bilateral agreement for the UK since its departure from the European Union, the pact is expected to increase bilateral trade by £25.5 billion annually. This milestone marks a significant shift in the trajectory of trade, investment, and strategic collaboration between two of the world’s fastest-growing economies.

Prime Minister Keir Starmer hailed the agreement as a “major win for Britain”, saying: “It will create thousands of British jobs across the UK, unlock new opportunities for businesses and drive growth in every corner of the country, delivering on our Plan for Change. We’re putting more money in the pockets of hardworking Brits and helping families with the cost of living.”

Announced against a backdrop of economic volatility and geopolitical flux, the agreement reflects a shared intent to usher in a decade of deeper cooperation across several areas. These include trade and defence, as well as clean energy, education, and cutting-edge technology.

Prime Minister Modi hailed the signing as a historic moment in the relationship between India and the United Kingdom. He emphasised the importance of a shared vision and reaffirmed both nations' commitment to progress as equal partners in innovation, security, and inclusive development.

For businesses and consumers alike, the deal offers tangible benefits. Indian exporters will gain unprecedented access to the UK market, while British consumers can expect lower prices and a wider range of products. On the UK side, the agreement opens new avenues for trade, job creation, and cross-border investment in industries ranging from aerospace to green energy.

According to the Department for Business and Trade, Indian buyers will soon be able to enjoy British goods, including soft drinks, cosmetics, automobiles, and medical equipment, at significantly reduced tariffs. Rates that previously averaged around 15 per cent will now fall to just 3 per cent. In return, UK consumers and businesses will see Indian products become far more affordable and widely available.

Business and Trade Secretary Jonathan Reynolds called the deal “historic” and stated, “India is one of the fastest-growing economies in the world and an emerging economic superpower.” This trade deal puts the UK in the best position to partner with India over the next decade, promising to unlock thousands of jobs and boost growth across both economies.”

Business and Trade Secretary Jonathan Reynolds praised the agreement, calling it a historic step forward. He also revealed nearly £6 billion in new investment commitments and export agreements. Twenty-six British companies are launching new ventures in India, including aerospace leaders Airbus and Rolls-Royce, which will supply aircraft and engines as part of contracts valued at approximately £5 billion.

Yet the scope of this partnership goes far beyond trade. The UK-India Vision 2035 outlines long-term objectives across various sectors. These include a new Defence Industrial Roadmap aimed at bolstering joint defence capabilities and sharing advanced technologies. The two nations will also strengthen their collaboration on climate and clean energy, with the UK gaining access to India’s rapidly growing renewable energy procurement markets.

In financial services, the agreement locks in liberalisation measures that remove key barriers to UK investment. India has committed to maintaining foreign investment caps in the insurance sector and to ensuring equal treatment for British firms, an essential step toward stability and long-term investor confidence.

Further collaboration will focus on addressing global threats, including corruption, organised crime, and irregular migration. Enhanced intelligence-sharing protocols and new operational frameworks are being established to support these efforts.

The timing of today’s announcement is notable. It coincides with the first anniversary of the UK-India Technology Security Initiative, launched in July 2024. Both governments reaffirmed their shared ambition to lead in frontier technologies, including artificial intelligence, quantum computing, space innovation, and cyberdefence.

For the UK’s green economy, the deal provides a unique foothold in India’s rapidly growing clean energy sector. Analysts expect this to give a substantial boost to British green tech exports while advancing India's broader energy transition strategy.

Education and innovation also sit high on the agenda. The two countries plan to deepen academic ties, expand student exchange programs, and increase collaborative research between universities and tech institutions. Over the coming decade, these partnerships are expected to foster significant cross-border talent and knowledge transfer.

As the UK Parliament prepares to ratify the deal, government officials are urging businesses in both countries to prepare for implementation. The agreement will be formally tabled in Parliament in the coming weeks, following standard legislative procedure.

The UK-India Vision 2035 is a key pillar of the government’s wider Plan for Change, which outlines the country’s strategic objectives in terms of economic recovery, international partnerships, and long-term energy security.