India-UK trade deal: How will the Free Trade Agreement benefit India? Top 10 takeaways for Indians

Time of India

24-07-2025

We take a look at how India and Indians stand to benefit from the free trade agreement with the UK. (AI image)
India-UK free trade deal: The landmark India-UK free trade agreement (FTA) was signed on Thursday in the United Kingdom in the presence of PM
Narendra Modi
and UK PM Keir Starmer. India stands to gain significantly from the trade deal in the form of access to cheaper British products, jobs, and duty-free access to UK markets for major Indian products.
British products such as automobiles, healthcare equipment, soft drinks and beauty items will become more accessible to Indian buyers, as the average duty rates decrease from 15% to 3%.
We take a look at how India and Indians stand to benefit from the free trade agreement with the UK:
1) Duty-Free Access
The free trade agreement guarantees that 99% of exports from India will have duty-free entry into British markets.
The agreement provides India significant benefits through the elimination of tariffs on roughly 99% of tariff lines, which is almost 100% of trade value.
India will considerably lower its import duties, with changes affecting 90% of tariff lines. About 85% of these products will become entirely free from tariffs over a ten-year period.
The UK is granting duty-free access to a diverse selection of products from India.
These reductions include marine products (from 20%), textiles and clothing (from 12%), chemicals (from 8%), and base metals (from 10%).
For the processed food industry, a significant development has occurred where duties on 99.7 percent of items have been completely removed from their earlier level of up to 70%. This elimination of tariffs presents substantial opportunities for Indian export businesses, the sources indicated.
2) Job Opportunities
The Free Trade Agreement will substantially boost job opportunities across India. It opens up fresh export avenues in labour-intensive industries, such as toy production, textiles, leather goods, footwear manufacturing, seafood products and more.
Other sectors poised to benefit include gems and jewellery crafting, engineering products, automotive components and engines, alongside organic chemical manufacturing.
3) Cheaper British cars, whiskey
The tariffs imposed on whisky and gin imports will see a significant decrease, dropping from 150% to 75% in the first phase. Subsequently, over a ten-year implementation period, these duties will be further lowered to 40%.
The duty rates for cars will come down drastically from the existing rate of more than 100% to just 10%. This is subject to quota limitations. British-manufactured vehicles, including Jaguars and Land Rovers, will benefit from this tariff reduction, enabling enhanced entry into India's vehicle market.
This reduction in duties would result in more affordable British vehicles for Indian consumers..
4) Big Agriculture, Farmer Benefits
Agricultural exports from India to the UK are projected to rise by more than 20% in the coming three years.
The growth will result from zero-duty access granted to numerous Indian agricultural and processed food items. The agreement will eliminate duties on more than 95% of India's agricultural and processed food products upon implementation.
The India-UK free trade agreement is set to create substantial advantages for the Indian agricultural sector, with farmers positioned to gain significant benefits.
The agreement will provide India's farmers access to premium UK markets for Indian agricultural products. India's farm products will be at an advantage compared to those currently available to European exporters from countries such as Germany and the Netherlands.
Traditional Indian spices including turmeric, pepper, and cardamom, alongside processed food items such as mango pulp, pickles, and pulses will receive duty-free entry, enhancing their profit margins and distribution scope.
The duty-free items encompass fruits, vegetables, cereals, spice mixes, fruit pulps, ready-to-eat meals, and additional products. This provision will reduce import costs in the UK and strengthen their market position in both mainstream and ethnic retail sectors.
The agreement creates new possibilities for emerging products including jackfruit, millets, vegetables, and organic herbs, enabling farmers to expand their crop variety and better handle domestic price variations.
5) Fisheries & Marine Sector
Notable advantages will be for the states along the coastline including Andhra Pradesh, Odisha, Kerala, and Tamil Nadu. Duty-free entry will now be allowed for products like shrimp, tuna, fishmeal, and feeds that presently attract tariffs ranging from 4.2 to 8.5%, which should substantially increase India's marine product shipments.
The UK's seafood import market is worth $5.4 billion - hence India has a big opportunity from this FTA.
6) Market for India's high-end branded products
India's premium branded exports, particularly in beverages and condiments sectors will also see a boost. The UK at present imports modest quantities from India - 1.7% of coffee, 5.6% of tea, and 2.9% of spices. Notably, Indian instant coffee manufacturers will gain a competitive advantage against German and Spanish suppliers in the lucrative high-end market segment.
7) Pharma & Other Sectors
The deal does away with duties on generic medicines and medical technology equipment from India, including ECG and X-ray machines. The zero tariff provisions will enhance competitiveness of Indian generics in UK market The deal benefits extend to information technology and IT-enabled services, banking and finance, professional consultancy and educational sectors as well.
8) Easier access for Indian professionals
The agreement also helps streamline mobility for qualified Indian professionals across various categories.
These include Contractual Service Suppliers, Business Visitors, Investors and Intra-Corporate Transferees. Additionally, it covers family members of transferees who have work authorization. The agreement also extends to Independent Professionals, specifically encompassing yoga instructors, musicians and chefs.
Indian professionals can now work in 35 UK sectors for twenty four months, even without a UK office.
9) Social Security Benefits
The UK has granted a notable concession by waiving social security contributions for Indian employees working there for up to three years. This exemption, under the Double Contribution Convention, applies to both workers and their employers. The arrangement delivers substantial financial benefits to Indian service companies operating in the UK market, enhancing their competitive advantage and operational efficiency.
According to the government, 75,000 Indian workers will now be exempt from the UK social security payments for three years.
10) Women Empowerment Across Sectors
According to an ANI report, the deal also aims to strengthen women's participation across multiple domains, such as traditional handlooms, heritage crafts, technology ventures and sustainable manufacturing, by facilitating their integration into worldwide supply networks, providing financial support and assisting business expansion.
The textile landscape in India fundamentally relies on women workers, including weavers, embroiderers, dyers and designers from Kanchipuram, Bhagalpur, Jaipur and Varanasi.
The iconic Kolhapuri chappals feature amongst the items that will receive advantages under this agreement. These handcrafted leather footwear items, produced by women and family-operated artisanal groups in Maharashtra and surrounding areas, will now enjoy tariff-free entry into the UK's high-end marketplace.
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