India-UK free trade pact: Tariff cuts, job access and market openings - Who gains what from the deal?

Time of India

23-07-2025

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India and the UK are set to sign a wide-ranging free trade agreement on Thursday during Prime Minister Narendra Modi's London visit, unlocking major tariff cuts and service sector benefits after three years of negotiations.
The pact promises gains for exporters, professionals and businesses on both sides, though it still requires approval from the British Parliament and India's federal cabinet.
India to get
duty-free access
on 99% of goods
As per news agency Reuters, the UK will offer duty-free market access to 99% of Indian products, covering nearly the entire trade value.
According to India's commerce ministry, this will particularly benefit labour-intensive exports like textiles, footwear, gems and jewellery, furniture, auto components, and engineering goods.
Many of these currently face UK duties ranging from 4% to 16%.
Big tariff cuts on Whisky, cars and more
India will reduce tariffs on nearly 90% of UK goods. The biggest cuts include duties on British whisky and gin, which will fall from 150% to 75% immediately and gradually to 40% within ten years.
Automobile tariffs on certain UK-made vehicles will drop from over 100% to 10% under a quota system. Other items like salmon, medical devices, chocolates, biscuits, and cosmetics will also see cheaper import duties in India.
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Easier entry for Indian professionals
The agreement opens up new avenues for Indian professionals. Chefs, yoga instructors, musicians, and other contractual service providers will have assured temporary access to the UK market. Business visitors, investors, and intra-corporate transferees will also benefit from relaxed rules.
Indian workers posted temporarily to the UK will be exempt from paying social security contributions for up to three years, saving nearly Rs 40 billion ($463 million) annually for them and their employers, according to Reuters.
Indian and British companies set to benefit
Indian exporters like Welspun India, Raymond, Arvind, Vardhman, Bata India, Relaxo, Tata Motors, and Bharat Forge are expected to gain from duty-free access in Britain.
In turn, British companies like Diageo, Aston Martin, and Tata-owned Jaguar Land Rover are likely to benefit from lower duties and easier access to India's growing market.
Public procurement access and
economic boost
According to news agency PTI, the pact will allow UK firms to bid on Indian federal government procurement tenders worth over Rs 2 billion in non-sensitive sectors.
The UK estimates the value of these tenders at about £38 billion a year.
The UK government expects the deal to add £4.8 billion ($6.5 billion) annually to its GDP.
Consumers in both countries stand to gain through cheaper imported goods.
The deal, formally called the Comprehensive Economic and Trade Agreement, also includes chapters on innovation, intellectual property, and government procurement.
Once signed by commerce minister Piyush Goyal and UK trade secretary Jonathan Reynolds in the presence of PM Modi and his British counterpart Keir Starmer, it will proceed for legislative clearances in both countries.
The goal is to double bilateral trade to $120 billion by 2030.
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