In a major milestone for international trade, India and the United Kingdom have signed a comprehensive Free Trade Agreement (FTA), marking a transformative moment in their economic and diplomatic relationship. This landmark agreement is set to deepen commercial ties and foster innovation, creating new pathways for collaboration across key industries.

The agreement eliminates or significantly reduces tariffs on over 90% of goods traded between the two nations. For Indian exporters, this means 99% of products – including textiles, garments, leather, footwear, pharmaceuticals, engineering goods, auto components, and marine products – will enjoy duty-free access to the UK market. This is expected to enhance India’s export competitiveness and boost outbound trade by 25%, with overall bilateral trade projected to grow by 38% by 2040.

On the import front, India will cut tariffs on 92% of goods from the UK. Key beneficiaries include whisky and gin (with duties halved immediately and gradually reduced further), cars (including electric vehicles), cosmetics, advanced machinery, medical devices, and select food and drink items. These reductions will make UK goods more affordable for Indian consumers and create new opportunities for industrial cooperation.

The FTA is anticipated to double bilateral trade to $120 billion by 2030 and stimulate job creation and economic growth in both countries. Strategic sectors in India stand to gain from increased foreign investment, technology transfer, and access to high-value goods and services. Certain sensitive domestic sectors – such as sugar, milled rice, pork, chicken, and eggs – have been excluded from the agreement to protect local interests.

Indian exports gaining duty-free access to the UK:

  • Textiles and garments
  • Leather and footwear
  • Processed and ready-to-eat foods
  • Gems and jewellery
  • Pharmaceuticals
  • Engineering goods and auto parts
  • Minerals, chemicals, plastics, rubber, wood, paper, glass, ceramics, base metals, machinery, arms/ammunition, furniture, sports goods, animal products, marine products (like frozen shrimp)

UK exports to India with reduced tariffs:

  • Whisky and gin (tariffs cut from 150% to 75% immediately, then to 40% over 10 years)
  • Cars (tariffs drop from over 100% to 10% under quotas, including electric and hybrid vehicles)
  • Cosmetics and toiletries (soaps, creams, perfumes, etc.)
  • Food and drink (chocolate, biscuits, soft drinks, non-alcoholic beer)
  • Medical devices, advanced machinery, auto parts, aerospace components, lamb, salmon

If you would like to speak to someone about this update and/or discuss our end-to-end service solutions for India, please contact our Customer Relationship Management team today on 01375 856060 or email crmteam@ugroup.co.uk.