London, Dec 26 (PTI) The highly anticipated free trade deal between India and the UK, in the works for over four years, came to fruition in 2025, alongside a ‘Vision 2035’ pact to revitalise bilateral ties beyond the realm of trade and investment.

The Free Trade Agreement (FTA) negotiations dominated the headlines for the major part of the year as both sides looked determined to get the deal over the line and formally signed off during Prime Minister Narendra Modi’s visit to the UK in July.

Keir Starmer, celebrating his own one-year mark as British Prime Minister, laid out an especially warm reception for Modi over cups of chai at his countryside residence Chequers, near London.

“We have agreed a landmark deal with India – one of the fastest growing economies in the world,” declared Starmer, formally accepting Modi’s reciprocal invitation to lead the “biggest British trade delegation to India ever” within weeks in October.

According to the UK Department for Business and Trade (DBT) analysis, the Comprehensive Economic and Trade Agreement (CETA) is expected to boost bilateral trade by over 25 billion pounds from the current 44.1 billion pounds when it is enforced following the customary ratification by the UK Parliament – expected in the first half of 2026.

“India is a growing force on the world stage, on track to have the third largest economy by 2028,” Starmer told the Commons following his Mumbai visit.

In a year packed with high-level two-way exchanges, both sides were also keen to spotlight the “ambitious and future-focused" 10-year ‘India-UK Vision 2035’ roadmap, which sets strategic goals for sustained collaboration and innovation across sectors.

An ever-expanding footprint of the UK’s higher education sector in India will begin to bear fruit from the New Year, with at least nine British universities finalising their overseas campuses in the country to cater to Indian demand for quality education.

These foreign campuses are also viewed as a positive counterbalance to UK Home Secretary Shabana Mahmood’s relentless immigration crackdown.

According to the latest Home Office data, around 45,000 Indians on study visas and 22,000 professionals on work-related visas left the country – contributing significantly to the downward trajectory of the UK’s net migration.

It promises to be an issue that will remain in sharp focus in 2026.

Besides her clampdown on illegal migration, tougher rules that double the wait for permanent UK residency for the majority to 10 years are likely to add to the exodus trend among Indians.

There is also a less desirable trend of billionaires fleeing the country's high tax economy.

Rajasthan-born Lakshmi N. Mittal, founder of ArcelorMittal steelworks worth an estimated 15.4 billion pounds and ranked the UK’s eighth richest man in ‘The Sunday Times Rich List’, is just one among several super-rich set to relocate to low-tax locales such as Dubai.

The news came in a year of significant tax rises unleashed by Chancellor Rachel Reeves, including abolishing the so-called non-dom status which had previously permitted overseas nationals living in Britain to register as non-domiciled to skirt around the higher rate of tax in the UK.

The year marked the end of an era in many ways, as a number of UK-based veteran Indian-origin entrepreneurs passed away, including hotelier Joginder Sanger, who died aged 82, and Hinduja Group co-chairman G.P. Hinduja, aged 85. Caparo Group founder Lord Swraj Paul, 94, and economist Lord Meghnad Desai, 85, – both prominent House of Lords peers – were also among the stalwarts who died, triggering tributes that resonated across the India-UK corridor and beyond.

Their contributions to industry, philanthropy and public service as well as an unwavering commitment to closer bilateral ties remained in focus, including at a special celebration of India-UK relations hosted by the UK’s Foreign, Commonwealth and Development (FCDO) in London.

Deputy Prime Minister David Lammy used the event to also express condolences for the terrorist attack in Delhi in November – a month when both sides came together to commemorate a shared commitment to fight terrorism with a ‘Human Cost of Terrorism’ exhibition hosted by the High Commission of India in London.

This sense of shared anguish flowed from the UK’s response to the “horrific terrorist attack” at Pahalgam in Kashmir back in April, followed by a plea for a “swift, diplomatic path forward” as India’s Operation Sindoor targeted terror camps in Pakistan and Pakistan-occupied Kashmir (PoK).

UK Foreign Office Minister Hamish Falconer expressed concerns related to the very “personal” aspect of the conflict for the large number of British Indians in the UK. This group also faced the brunt of the airline disaster involving a London Gatwick-bound Air India flight, which crashed soon after takeoff from Ahmedabad on June 12.

It claimed the lives of all but one of the 242 passengers and crew on board, with Vishwas Kumar Ramesh the sole miraculous survivor from seat 11A of the Boeing 787-8 Dreamliner. He returned to his Leicester home later in the year and shared his post-traumatic stress disorder (PTSD) struggles over the loss of his co-passenger brother. The investigation into the crash remains ongoing in India, with the UK aviation authorities granted "expert" status due to the 53 British nationals on board.

Meanwhile, long-drawn legal wrangles also remained ongoing as fugitive economic offenders wanted in India on charges of fraud and money laundering continued to fight extradition. While Vijay Mallya remains out on bail in the UK, diamond merchant Nirav Modi's appeal to reopen his extradition case from behind bars in London has been adjourned till March.

Sanjay Bhandari, the arms consultant wanted in India for alleged tax evasion and money laundering, won his UK High Court appeal against extradition on human rights grounds and was discharged from bail.

The UK government also sanctioned a British Sikh businessman, Gurpreet Singh Rehal, and a group associated with him in the first use of the country's 'Domestic Counter-Terrorism Regime' to disrupt funding for the pro-Khalistan militant group Babbar Khalsa. PTI AK GRS RD RD RD

India UK free trade agreement in 2025 set to boost bilateral trade and deepen strategic cooperation. The 2025 India UK Free Trade Agreement (CETA) and a concurrent 'Vision 2035' establish a legal framework to expand market access, investment facilitation and sectoral cooperation. UK analysis forecasts the FTA will boost bilateral trade by over 25 billion from current levels when enforced following customary Parliamentary ratification expected in the first half of 2026. Complementary domestic policy changes-on higher education campuses, immigration and residency rules, and taxation-interact with the FTA's economic effects and affect mobility and investment decisions.