Can I travel to Spain with UK ILR and Indian passport?

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Citizens of EU Annex I countries must possess a visa to enter the territory of a member state. India is an Annex I country. While the citizens of EU Annex II countries (the list appears at the bottom of the document previously linked) may enter without a visa, you are not a citizen of an EU Annex II country.

Spain is a member of the EU. Thus, you must apply for and have received a visa before travel. Because Spain appears to be your principal (or only) destination, you must secure this visa from Spain.

Having UK ILR doesn't allow you to enter the EU without a visa, but will provide some evidence to the visa examiner that you have ties outside of Spain and the EU, and will therefore be more likely to leave on time.

EDIT 2-19-2022

While this Answer speaks of the EU, it would be more accurate to refer to the Schengen Area, as the rules of the Schengen Agreement (not the European Union) control entries and visas to Schengen countries. Schengen incorporates and applies the EU's "Annex" lists.

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