What is the India-UK Free Trade Agreement?
India and the United Kingdom (UK) have concluded a landmark Free Trade Agreement (FTA) after 14 rounds of negotiation spanning three years. The agreement eliminated tariffs on 99% of Indian goods and reduced duties on 90% of UK tariff lines. In 2024, bilateral trade between the two stood at USD 57 billion, with India being the UK’s 11th largest partner. The new agreement is expected to increase bilateral trade between the countries by USD 34 billion annually from 2040.
Eight Key Sector to Benefit from the India-UK FTA
Automobile
Indian import duties for UK-made vehicles will drop from over 100% to 10%, along with new quotas introduced to regulate auto imports. This will make high-end British cars more affordable for Indian consumers.
ITES
The agreement will ease the movement of Indian IT professionals and improve market access for Indian tech firms. The introduction of the Double Contribution Convention (DCC) will exempt Indian workers temporarily in the UK from social security contributions for three years.
Pharmaceuticals
The FTA is expected to simplify the UK’s regulatory approval process for Indian generic drugs. This will bolster exports from India’s pharma sector.
Industrial and Engineering Goods
Indian suppliers are likely to see a rise in demand from the UK’s infrastructure and industrial sectors.
Alcohol & beverages
Import duties on Scotch and British gin will be halved from 150% to 75% and further down to 40% in the course of 10 years, making premium spirits more accessible in India.
Textiles
With the elimination of tariffs, Indian textiles and apparel exports will become more competitive in the UK, opening new doors for Indian manufacturers and weavers.
Agriculture and Food
Indian tea, spices, and ready-to-eat products will receive tariff concessions, improving market access for Indian brands in the UK.
Gems and Jewelry
The FTA is projected to boost India’s exports of gems and jewellery to the UK, potentially reaching USD 2.5 billion in two years, with total bilateral trade in the sector expected to double up to USD 7 billion.
Consumer Gains from the India-UK FTA
The India–UK Free Trade Agreement brings dual benefits to consumers in both nations.
- UK consumers are expected to benefit from lower prices on Indian textiles, footwear, apparel, and marine products.
- Indian consumers may see reduced costs on UK imports such as cosmetics, medical equipment, Scotch whisky, and premium automobiles.
Final Thoughts
The India–UK FTA marks a major milestone in bilateral trade and investment relations, promising significant sector-wise growth, export expansion, and consumer benefits. As trade volumes rise, both economies are poised to strengthen ties across technology, manufacturing, agriculture, and lifestyle sectors.