Updated on June 09, 2025 06:06:29 PM
The India-UK Free Trade Agreement (FTA) was signed on Tuesday, May 6, 2025, marking a huge milestone in the economic relationship of India and the United Kingdom. After negotiating for three years, the FTA deal is expected to revolutionize bilateral trade. The current value of the trade volume between India and the UK is £42.6 billion as of 2024, and it is projected to double by 2030. Under the framework of the free trade agreement, 99% of Indian exports, which include textiles, auto parts, gems and engineering products, will get benefits like zero-duty access into the UK market. Other than that, the United Kingdom will get reduced tariffs on key products such as whisky and cars, and with automotive tariffs will be reduced from over 100% to just 10% under a quota system.
The UK-India FTA is expected to offer new opportunities for Indian exporters and provide additional labour mobility provisions, including 100 annual visas to Indian professionals working in sectors like healthcare and IT. But, there are still concerns especially for farmers who may face price drops in agricultural products like tea, spices and rubber. Additionally, small and medium-sized enterprises (MSMEs) are concerned about increase in competition in public procurement. It is also important to note that the Free Trade deal also addresses possible challenges caused by carbon-based tariffs on Indian aluminum and steel exports.
Table of Content
The India-UK Free Trade Agreement (FTA) is a landmark trade deal that was proposed to boost economic ties between India and United Kingdom. It will help reduce tariffs on a variety of goods and services, ease market access and promote investment and labour mobility. The INDIA UK FTA deal covers sectors like textiles, automobiles, gems, engineering goods, and beverages. With bilateral trade already around £42.6 billion, the free trade agreement is expected to significantly increase this volume in the coming years. It also addresses earlier trade barriers and creates new growth opportunities for both countries.
India and the United Kingdom signed a historic Free Trade Agreement on May 6, 2025, after more than three years of negotiations. The FTA deal signed by the UK post-Brexit is very comprehensive and ambitious, with several implications for both nations investment, commerce and jobs. Here are the major updates:
Although the FTA is being appreciated for its economic potential, but the concerns regarding how it will affect the Indian farmers and MSMEs are on the rise, highlighting the demand for policy protections.
The signing of India-UK Free Trade Agreement on May 6, 2025, is a huge step in the growth of strategic and economic ties between the two countries. The FTA Deal provides India with duty-free entry to the UK market for key sectors like engineering products, textiles, jewelry and automobile components. It is expected to boost exports, generate new employment, and attract more foreign investment.
The agreement provides the UK with greater access to one of the world's fastest-growing economies. With its departure from the European Union, the UK is looking to expand its global commercial presence through this agreement. Lower import tariffs and simplified trade regulations will help sectors such as financial services, automobiles, and Scotch whiskey.
The India-UK agreement also promotes cooperation in technology, renewable energy and digital innovation. Both nations see this as a move towards long-term economic progress, climate action and a highly equitable global trade system.
There will be several benefits for both nations due to the India-UK Free Trade Agreement that will help boost the trades, investments and economic cooperation.
Several Indian home-based industrial sectors have praised the India-UK Free Trade Agreement , expecting better export opportunities and economic growth. The following are some key insights regarding the India-UK FTA deal.
Although the India-UK Free Trade Agreement has several benefits, Indian stakeholders, particularly agricultural and MSME sector stakeholders, have raised some concerns
Conclusion
The India-UK Free Trade Agreement (FTA) is a historic achievement that is capable of boosting trade, investment and labor mobility between both nations. The agreement offers major benefits to India, such as duty-free access for important exports and increased job opportunities. It extends the UK's access to one of the world's rapidly-growing economies. Although some concerns have been brought to light, particularly by India's agricultural and MSME sectors, about the prices that are unstable and increasing competition. While the India-UK FTA is expected to provide new economic prospects, thorough monitoring of its effects is important.
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Frequently Asked Questions
In a bid to enhance trade, investment, and economic cooperation between the UK and India, the two nations signed the India-UK Free Trade Agreement (FTA) on May 6, 2025. It aims at facilitating labor mobility between the two countries, fostering investment, and lowering tariffs on goods and services.
Lower tariffs on export assistance benefit India by improving industry such as textile and automobile component industries, rising job generation, boosting foreign investment in technology and clean energy, and enhancing the mobility of workers by providing access to easier entry to the UK by specialists as well as an exemption to social security for three years.
The FTA will considerably favor Indian exports, and 99% of them will enjoy duty-free or tariff-reduced access to the UK. Exports of textiles, technical products, leather, and auto components will significantly increase, making them competitive in the UK market.
The India-UK FTA is expected to increase bilateral trade by £25.5 billion annually by 2040, with significant rises in exports and foreign investment. This will enhance both nations' economic growth and further bind their economic links.
The FTA is estimated to increase India's automobile industry by opening the door for Indian automobile manufacturers' access to the UK mass market. Reduced Indian production costs would ensure that Indian cars remain competitive, while the UK will benefit from access to India's growing luxury car market.
The FTA also has provisions to promote the mobility of workers, particularly of Indian professionals working in the fields of healthcare and IT. Indian employees will freely move to the UK due to a three-year relaxation from UK social security contributions.
The United Kingdom and India signed the Free Trade Agreement on 6 May 2025, after over three years of negotiation.
The UK gains access to the growing market of India, reduced tariffs on exports such as whiskey and cars, investment opportunities in renewable energy and technology, greater labor mobility for the employment of Indian experts, and more diverse, lower-cost supply chains.
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