How Will the India-UK Trade Deal Affect Investments?

India and the UK signed a new trade deal on May 6, 2025 that will change how these countries invest in each other. The deal cuts taxes on 99% of what India sells to the UK and lowers fees on 90% of UK goods coming into India. Because of these changes, trade between the two countries could grow from $60 billion to $120 billion by 2030. Companies will likely invest more money in both countries, especially in tech, factories, and services, so both places will see more jobs and growth.

The deal goes beyond just physical goods and includes services and digital business too, making investors feel safer about putting money in. For the first time ever, the UK has let Indian companies bid for government contracts just like local firms can. This opens new doors for Indian businesses wanting to work in the UK. British companies will also find it cheaper and easier to work in India, so they’ll want to invest more there.

Some problems still need fixing, though. The UK plans to start charging extra fees in 2027 on imports from places with lower carbon taxes, and this might hurt Indian steel and aluminum sales. The countries also haven’t figured out how to handle investment disputes or tax issues yet. They need to solve these problems for the trade deal to work as well as it could for investors from both sides.