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Tariffs

India Secures Market Access for Key Sectors Under UK-India Free Trade Deal

Strategic Insights

— 1 min read

The long-awaited UK-India Free Trade Agreement (FTA) has been finalized, with both countries agreeing to eliminate tariffs on a significant percentage of goods and services. The deal marks a major shift in India's trade policy, with New Delhi allowing British companies to participate in government procurement tenders and opening up the highly-tariffed automobile and alcoholic beverage industries. In return, the UK has granted duty-free access to Indian goods, including textiles, gems, and jewelry, as well as seafood, dairy, and meat products.

Key Takeaways:

  • The UK-India FTA will eliminate tariffs on 99.7% of India's food sector tariff lines, reducing tariffs from as high as 70% to zero.
  • India has allowed British companies to participate in government procurement tenders, including those under the 'Make in India' rules, which require 20-50% domestic value addition.
  • The deal will grant duty-free access to Indian textiles, gems, and jewelry, as well as seafood, dairy, and meat products.
  • India will benefit from tariff elimination on approximately 99% of tariff lines, covering nearly 100% of trade value.
  • The pact includes chapters on goods, services, innovation, government procurement, and intellectual property rights.
  • The two countries have concluded negotiations on the Double Contribution Convention Agreement, or social security pact, which will help avoid double contributions to social security funds by Indian professionals working for a limited period in Britain.
  • Talks on the Bilateral Investment Treaty (BIT) are still ongoing.

Statistics:

  • India's exports to the UK rose by 12.6% to $14.5 billion in 2024-25, while imports grew by 2.3% to $8.6 billion.
  • Bilateral trade between India and the UK increased to $21.34 billion in 2023-24 from $20.36 billion in 2022-23.
  • The UK-India FTA will reduce tariffs on aerospace products from 11% to 0%, automobiles from 110% to 10%, and electrical machinery from 22% to 0%.
  • The agreement will grant duty-free access to Indian textiles, gems, and jewelry, as well as seafood, dairy, and meat products.

Sources:

  • The Indian Express (P) Ltd Copyright 2025 IE Online Media Services Pvt. Ltd., distributed by Contify.com

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