India-UK FTA: Experts are bullish on these sectors, recommend top stocks that can benefit from the agreement

Mint

24-07-2025

India-UK FTA: Various sectors and stocks from the Indian stock market will likely hog the limelight on Friday, July 25, when trading resumes on the bourses following the landmark free trade agreement (FTA) between India and the UK.
The FTA, which covers a wide array of sectors, will cut tariffs for various British imports while 99% of Indian exports to the UK would see duties eliminated to zero, including for segments like textiles, leather goods, agri products, medical devices and drugs, as per the documents shared by Indian officials. Additionally, the India-UK FTA will make it easier for British firms to export whisky, cars and other products to the country.
The FTA signed by the two countries is expected to boost bilateral trade by around $34 billion annually.
The deal was signed by Commerce Minister Piyush Goyal and his British counterpart Jonathan Reynold in the presence of Prime Minister Narendra Modi and his British counterpart Keir Starmer.
Analysts believe that the India-UK trade deal is a lesson in global economic diplomacy and India's growing prominence in global trade. It assumes even more importance for India as it negotiates a trade deal with the US amid tariff threats.
Moreover, with the China-plus-one policy gathering steam, India has emerged as an alternative. Analysts said that for India, the FTA could lead to more exports and greater foreign investment.
Harshal Dassani, Business Head, INVasset PMS, said the zero-duty access to UK markets for textiles, gems, jewellery, seafood, engineering goods, and pharmaceuticals comes at a time when global supply chains are seeking China+1 partners. The agreement isn't just a diplomatic milestone—it's a targeted economic catalyst for multiple Indian sectors, Dasani added.
Meanwhile, Pallavi Bakhru, Partner and UK Corridor Leader, Grant Thornton Bharat, believes the India–UK free trade agreement marks a pivotal moment - not only for boosting bilateral trade volumes, but for sparking employment and industrial renewal across both economies. She added that this FTA could unlock £25.5 billion in annual trade.
Analysts largely remain bullish on sectors like textiles, gems and jewellery, and seafood as the deal opens direct market access in these export verticals. Additionally, they are also bullish on the sectors like auto, pharma and agriculture that could benefit.
According to the FTA, Indian farm products will get the same low-tax treatment as products from top European countries like Germany, with India securing zero duties on 95% of agriculture and processed food items. Against this backdrop, Mahesh Ojha of Hensex sees agriculture-related stocks seeing an upside. "Duty-free access is expected to increase agri exports by over 20% in the next three years, contributing to India's goal of $100 billion agri-exports by 2030," the official said.
The CETA eliminates UK tariffs on India's marine products. Despite the UK's $5.4 billion marine import market, India's share remains at just 2.25%, underscoring a significant untapped opportunity. Against this backdrop, Dasani said marine exporters such as Avanti Feeds could scale volumes rapidly with tariff barriers lifted.
Under the FTA, there will be no import duties on Indian textiles and leather, which will make India more competitive with other exporting countries like Bangladesh and Cambodia. Dasani said for labour-intensive sectors like textiles, companies such as Vardhman Textiles and Arvind will benefit from an 8–12% cost advantage over global peers, unlocking new export orders. Meanwhile, Ojha recommends Welspun India and Arvind.
India's total gems and jewellery exports to the UK are valued at $941 million, with $400 million coming from jewellery. The FTA opens up a huge market as the UK imports approximately $3 billion worth of jewellery annually. According to officials, tariff relaxations under the FTA are projected to double India's gems and Jewellery exports to the UK within the next 2-3 years. Jewellery and gems players like Titan and Kalyan Jewellers will gain from duty-free access in a high-margin market like the UK, where Indian craftsmanship is already well regarded, Dasani recommended.
From 16% to zero, tariffs have been eliminated on India's leather and footwear. Ojha expects Relaxo and Bata India to benefit from this agreement.
Engineering and auto component firms, notably Bosch India and SKF India, will ride on increased machinery and precision equipment exports, aided by a trusted trading framework, said Dasani. India will cut duties to 10% from over 100% under a quota system that will be gradually liberalised. In return, Indian manufacturers will gain access to the UK market for electric and hybrid vehicles, also under a quota system. Meanwhile, Ojha recommends looking at Tata Motors, Bharat Forge and Sona Comstar.
Under the trade agreement, tariffs on Scotch whisky will drop to 75% from 150%, and then slide to 40% over the next decade, according to the British government. This, according to Ojha spells good for United Spirits, a subsidiary of UK-based Diageo PLC.
Further, the focus on services, defence, education, and climate opens up avenues for IT giants like Infosys and TCS through greater mobility and cross-border contracts, Dasani said. "As tariffs fall and credibility rises, Indian exporters gain pricing power, scale access, and long-term visibility—key ingredients for rerating export-heavy portfolios in 2025 and beyond," he added.
(With inputs from agencies)
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