Prime Minister Narendra Modi is on his fourth visit to the UK. He will hold wide-ranging discussions with PM Keir Starmer on the entire gamut of India-UK bilateral relations, and exchange views on issues of regional and global importance. He is also expected to call on King Charles III. During the visit, the two sides will also review the progress of the Comprehensive Strategic Partnership (CSP) with a specific focus on trade and economy, technology and innovation, defence and security, climate, health, education, and people-to-people ties.
Following the UK’s exit from the European Union, economic and trade relations between the two countries acquired a new salience. India-UK bilateral trade set a new record when it crossed $55 billion (£42.6 billion) in 2024, registering an increase of around 10 per cent over the previous year.
Growing trade ties
Indian companies have made significant investments in the UK. Grant Thornton (GT) and Confederation of Indian Industry (CII) research in 2024 highlighted a record number of 971 Indian companies in the UK with a combined turnover of over £68 billion. The report India Meets Britain Tracker 2024 found that Indian companies in the UK are thriving, with 100 companies having a revenue growth of at least 10 per cent. The Britain meets India Tracker 2024 identified 667 British companies in India with a turnover of approximately £47.5 billion. The UK is the sixth-largest contributor of FDI to India. Cumulative FDI from the UK to India is around $36 billion between 2000 to March 2025. India’s investment in the UK during this period is close to $20 billion.
The Indian diaspora in the UK is also a major presence in the UK’s economic scenario. The 2020 GT report, done with the High Commission of India, London, and Federation of Indian Chambers of Commerce & Industry (FICCI), identified 654 diaspora-owned companies with a turnover of at least £100,000, generating a cumulative annual turnover of £36.84 billion. The wealth generated by Indian diaspora-owned businesses in the UK was estimated to be around £75 billion by this report. The 1.8 million Indian diaspora forms about 2.7 per cent of the UK’s population.
During PM Modi’s visit, the signing of the India-UK Free Trade Agreement (FTA) is expected. The forward-looking agreement complements India’s growth aspirations. The FTA has been described as both historic and ambitious. It is expected to boost jobs, exports, and growth, benefitting 99 per cent of Indian exports from zero per cent duty, opening export opportunities for labour-intensive sectors such as textiles, marine products, leather footwear, sports goods and toys, gems and jewellery, and others such as engineering goods and organic chemicals. Trade in services is also expected to receive a significant fillip. Enhanced global mobility for aspirational young Indians and a three-year exemption from social security payments come as a major relief for Indian employees and companies based in the UK.
Despite the record bilateral trade, the UK’s trade with India accounts for around 2.5 per cent of its total trade. With both sides seeking trade diversification and supply-chain resilience, an India-UK FTA will hopefully create the doorway for businesses to drive the economic relationship forward.
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Partnership in defence sector
Given the immediate challenges on India’s borders, cooperation in the defence sector with partners such as the UK has achieved greater importance. Defence Minister Rajnath Singh’s visit to the UK in January 2024 provided fresh impetus to the defence pillar of the relationship. In 2023, ties were elevated to a 2+2 mechanism. The British defence sector could emerge as a key collaborator in technology transfers, the development of advanced capabilities, and supporting the Make in India effort by attracting more British FDI into the defence sector.
Several defence cooperation agreements—covering production of Man Portable Air Defence Systems (MANPADS) and Lightweight Multirole Missiles (LMM), the establishment of an Advanced Short-Range Air to Air Missile (ASRAAM) assembly and test facility in India and a Statement of Intent to design and develop an Integrated Full Electric Propulsion system for Indian Navy ships—signal good times ahead for India’s defence sector.
India’s focus on indigenous development does present challenges for the British industry, with fears that it could potentially make cooperation in certain sectors commercially unviable. Intellectual-property (IP) issues also need to be resolved. These issues can hopefully be addressed through the robust defence engagement mechanism that now exists between the two countries.
Moreover, the UK–India military cooperation has grown in recent times. The Royal Navy made six ship visits to India in 2023, while its Littoral Response Group (South) conducted exercises with the Indian Navy in March 2024. In August 2024, the UK’s Royal Air Force participated in exercise Tarang Shakti in India. An Indian naval officer, Lieutenant Commander N Dinesh Anand, has joined Britannia Royal Naval College as Divisional Training Officer for the first time.
Tech ties
India and the UK are making a serious effort to build technology partnerships. The new bilateral Technology Security Initiative (TSI), formally launched during UK Foreign Secretary, David Lammy’s visit, aims to catalyse collaboration on critical and emerging technologies in seven key sectors: telecoms, critical minerals, semiconductors, Artificial Intelligence, quantum, biotechnology and health technology, and advanced materials.
Tech collaboration between India and the UK also extends to sectors including financial services, innovation in health, climate, renewables, and startups. The participation of stakeholders from government, industry, and academia would be important for taking the Technology Security Initiative forward. Both countries are global hubs of innovation, science, technology, and research. India is one of the world’s largest startup ecosystems and has over 100 unicorn companies. The increasing focus on these areas is welcome.
Education is an important pillar of India-UK relations. The University of Southampton opened its campus in Gurugram on 16 July 2025, becoming the first foreign university campus under the New Education Policy (NEP). The UK remains one of the preferred destinations for Indian students, with around 1,70,000 students studying in the UK in the academic year 2023-2024.
PM Modi’s visit will hopefully set the stage for more robust and deeper bilateral relations between the two countries.
The author was India’s High Commissioner to the United Kingdom from 2018-20. She tweets @RuchiGhanashyam. Views are personal.
(Edited by Ratan Priya)