Key Event: Historic Visit of the British Prime Minister

In October 2025, British Prime Minister Keir Starmer’s visit to India marked a new chapter in bilateral relations. During the two-day visit, India and the UK signed several key agreements that will shape the trajectory of relations over the coming decade.

Historic Cooperation in the Defense Sector

₹4200 Crore Missile Deal

The most significant agreement was a missile deal worth £350 million (about ₹4200 crore). Under this agreement:

India will procure Lightweight Multirole Missiles (LMMs) for its armed forces

These missiles will be manufactured by Thales Company in Belfast, Northern Ireland

The deal is expected to create 700 jobs in the UK

These are the same missiles currently being produced for Ukraine

Other Defense Cooperation

Indian Air Force flying instructors will now serve as trainers in the Royal Air Force (RAF), UK

An initial agreement worth £250 million has been signed for the development of electric engines for the navy

Revolutionary Cooperation in Higher Education

9 British Universities Opening Campuses in India

Prime Minister Modi announced that 9 British universities will set up campuses in India:

Already established/approved campuses:

University of Southampton – Gurugram (already operational)

University of Liverpool – Bengaluru

University of York – Mumbai

University of Aberdeen – Mumbai

University of Bristol – Mumbai

Lancaster University – Bengaluru

University of Surrey – GIFT City, Gujarat

👉 This represents the largest higher education footprint of any foreign country in India.

Economic Cooperation and Trade Agreement

Status of the Free Trade Agreement (FTA)

The India–UK Comprehensive Economic and Trade Agreement (CETA), signed in July 2025, is expected to be implemented within a year.

Key Features:

99% of Indian exports will get zero-duty access

Tariffs will be reduced on 90% of UK exports

Target: $120 billion bilateral trade by 2030

UK Investment Announcements

During Starmer’s visit, 64 Indian companies announced £1.3 billion investment in the UK, expected to create 6,900 new jobs.

Visa and Migration Issues

Work Visa for Indian Professionals:
Currently, 82,000 Indian professionals receive UK work visas annually. India has demanded an increase to 125,000 per year.

Student Visa Quota:
India is also pushing to raise the annual quota from the current 92,000 students.

Young Professionals Scheme:
For 2025, 3,000 slots have been reserved for Indian citizens aged 18–30, allowing them to live and work in the UK for up to two years.

Technology and Innovation

Critical Minerals Observatory

A satellite campus of the UK–India Critical Minerals Supply Chain Observatory will be set up at IIT-ISM Dhanbad.

Objectives:

Ensuring a secure supply chain of critical minerals

Promoting green technologies

Advancing mining sector research and innovation

FinTech Cooperation

Establishment of the UK–India FinTech Corridor to:

Provide opportunities for startups to pilot and scale innovations

Enhance cooperation between the London Stock Exchange and GIFT City

Artificial Intelligence (AI)

PM Modi announced that while the AI Safety Summit began in the UK, the AI Impact Summit will be hosted in India next year.

For India, AI stands for “All Inclusive.”

Political and Diplomatic Issues

Khalistan Issue

PM Modi raised concerns about Khalistani elements active in the UK:

Violence and extremism have no place in democracy

Action must be taken under the legal frameworks of both countries

Democratic freedoms should not be misused

India’s Economic Prospects

Third-Largest Economy by 2028

According to Morgan Stanley, India will become the world’s third-largest economy by 2028, surpassing Germany.

Key Projections:

GDP by 2028: $5.7 trillion

GDP by 2035: $10.6 trillion (double of 2028)

Contribution to global growth in the next decade: 20%

Vision 2035 Roadmap

Both countries adopted a 10-year roadmap under Vision 2035 covering:

Trade and investment

Technology and innovation

Defense and security

Climate and energy

Health and education

People-to-people ties

Importance for Exam Preparation

For UPSC Mains

International Relations (GS Paper-II):

Evolution of India–UK bilateral relations

Impact of Free Trade Agreements

Strategic significance of defense cooperation

Diplomatic challenges of the Khalistan issue

Economy (GS Paper-III):

Economic impact of FTA and trade balance

India’s improving global economic position

Strategic importance of critical minerals

International cooperation in the FinTech sector

Science & Technology (GS Paper-III):

Cooperation in defense technology

India–UK partnership in AI

Expansion of Digital Public Infrastructure globally

Possible Mains Questions

“How important is the India–UK Free Trade Agreement for India’s economic diplomacy? Evaluate its potential advantages and challenges.”

“Why is a secure supply of critical minerals essential for India’s energy security?”

“How is India’s FinTech revolution enhancing its soft power in the age of digital diplomacy?”

Key Facts for Prelims

LMM Missile Deal: £350 million

9 British universities opening campuses in India

Critical Minerals Observatory at IIT-ISM Dhanbad

India to become third-largest economy by 2028

Adoption of Vision 2035 Roadmap