U.K. government officials defend FTA with India

The U.K. government said India would cut tariffs on £400 million of U.K. goods, highlighting gin, whisky and a quota system for U.K. car exports to India. Representative image. 
| Photo Credit: Getty Images/iStockphoto

Faced with concerns around migration and tariffs, the U.K. government found itself having to defend a comprehensive “free trade” agreement (FTA) with India, announced by Prime Minister Narendra Modi and U.K. Prime Minister Keir Starmer on Tuesday (May 6, 2025). The U.K. Department of Business and Trade issued an infographic on X on Thursday (May 8, 2025), about the trade deal, titled, “Let’s clear some things up”, addressing issues around national insurance (social security) contributions, migration and tariffs.

“This is the biggest trade deal the U.K. has done with a single trading partner since leaving the EU,” the government said in response to the criticism that the impact of the deal was marginal. The U.K. government said it had a first mover advantage in India, “a huge market where opportunity is growing year by year”.

Addressing the criticism that lower tariffs were only beneficial to India, the U.K. government, in its message on Thursday (May 8, 2025), said India would cut tariffs on £400 million of U.K. goods, highlighting gin, whisky and a quota system for U.K. car exports to India.

Also read: What is the India, U.K. Double Contribution Convention agreement?

On immigration, the statement said, “It will not be cheaper to higher Indian workers rather than British workers,” emphasising that employers would still need to make National Insurance contributions and bear visa costs and the health surcharge (a payment made during the visa application process to access Britain’s National Health Service).

Earlier in the week, Indian High Commissioner to the U.K., Vikram Doraiswami, had told LBC Radio that the FTA was “never about visas” , neither in the period when the Conservative Party was in power and not under the current Labour government.

The Conservative Party, which is battling for space on the right with Reform UK, the nativist party that made gains in last week’s local elections, was among those leading the charge against the Labour government on the trade deal. Conservative Party leader Kemi Badenoch, who was the U.K. Business and Trade Secretary in 2023 and 2024, accused the government of agreeing to “two-tier” taxes. Her position, however, was at odds with members of her own party, some of whom praised the deal.

Trade Minister Jonathan Reynolds made media appearances on Wednesday (May 7, 2025), defending the clauses of the deal – particularly on the sensitive issues of migration and labour costs.  Reform UK’s leader, Nigel Farage, had said the trade deal had “sold out British workers”.

“We have agreements of this kind with 50…50 other countries…with the U.S., Canada, Japan, South Korea, Chile,” Mr. Reynolds told Times Radio, with regard to the clause exempting some Indian and British workers employed in the U.K. and India, respectively, from paying into their host countries’ social security systems for a period of three years.

“This is not something new or novel to the agreement, it means our people pay into our system, and their people pay into their system,” he said.

Mr. Starmer termed the criticism “incoherent nonsense” in the House of Commons on Wednesday (May 7, 2025).

New Delhi had referred to the national insurance exemption as a “huge win” in a government release.

There is more activity for the Starmer government on the trade front this week, with the U.K. and the U.S. are expected to announce a trade deal later on Thursday (May 8, 2025).

(£1 = $1.33)