On May 6, 2025, India and the United Kingdom finalized a landmark Free Trade Agreement (FTA), marking a significant milestone in bilateral trade relations. This comprehensive deal is poised to enhance economic ties between the two nations, offering substantial benefits to various sectors.

Key Highlights of the India-UK FTA

• Zero-Duty Access for Indian Exports: The agreement grants duty-free access to 99% of Indian exports to the UK, covering nearly all trade value. This move is expected to boost India's export sectors, including textiles, marine products, leather, footwear, sports goods, toys, gems, and jewellery.
  
  

• Tariff Reductions on UK Imports: India will reduce tariffs on 90% of British goods, notably cutting whisky tariffs from 150% to 40% over a decade and car tariffs from over 100% to 10%.
  
  

• Boost to Bilateral Trade: The FTA is projected to increase annual bilateral trade by £25.5 billion ($34.13 billion) by 2040, enhancing economic growth for both countries.
  
  

• Social Security Exemptions: Indian professionals working temporarily in the UK will be exempt from dual social security contributions for up to three years, reducing financial burdens and encouraging workforce mobility.

Sectoral Impacts

The India-UK FTA is expected to deliver significant benefits across a range of industries, with zero-duty access enhancing competitiveness and market reach for Indian exporters.

• Textiles and Apparel: With duty-free access, Indian textile exporters are poised to strengthen their presence in the UK market, leveraging competitive pricing and quality.
  
  

• Marine Products: Exporters of marine goods, particularly frozen shrimp, are expected to benefit from the elimination of tariffs, enhancing competitiveness.
  
  

• Leather and Footwear: The FTA opens new avenues for Indian leather and footwear industries, facilitating easier entry into the UK market.
  
  

• Sports Goods: The agreement presents a strong opportunity for Indian sports goods manufacturers, especially those from hubs like Jalandhar and Meerut. Products such as cricket gear, gym equipment, and other sporting goods can enter the UK market more competitively, driving exports and encouraging global recognition of Indian craftsmanship.
  
  

Broader Economic Implications

The India-UK FTA is not just a trade agreement but a strategic partnership that sets a precedent for future international collaborations. By addressing tariff and non-tariff barriers, the deal enhances market access, promotes economic diversification, and strengthens geopolitical ties.

Both Prime Minister Narendra Modi and UK Prime Minister Keir Starmer have lauded the agreement as a mutually beneficial arrangement that underscores the commitment to free and fair trade. 

Conclusion

The India-UK Free Trade Agreement signifies a transformative step in international trade relations, offering expansive opportunities for Indian exporters and contributing to global economic integration. As the agreement comes into effect, stakeholders across various sectors are encouraged to explore the new avenues it presents for growth and collaboration.

Reference articles: Moneycontrol, The Times of India, Business News Today, Reuters, AP News, TCEFO.com

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