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Indian Express
24 minutes ago
- Business
- Indian Express
India-UK trade deal to be signed today: Navigating protectionism, political turmoil, and shadow of Trump's tariffs
India and the UK are poised to sign the long-awaited Free Trade Agreement (FTA) today — a pact that was years in the making, driven by mutual concerns over China, and finalised amidst a rapidly evolving US trade policy that has compelled nations worldwide to secure access to new markets. The India-UK deal is significant as it would be the most comprehensive free trade agreements for India to have entered into so far and is going to be closely watched as a template for other upcoming major trade deals such as the agreement with the European Union. The India-UK deal will also mark the beginning of integration between the advanced services sector in the UK and that of India along with opening doors for high-end British cars and whisky into India, albeit in a phased manner. India and the UK (then part of the EU) began exploring the possibility of a trade deal back in 2007. However, Europe's demands for access to India's key job-generating sectors, such as automobiles and agriculture, were too steep for the government to build a consensus within the country, leading to the talks' failure. After deciding to withdraw from negotiations for the Regional Comprehensive Economic Partnership (RCEP) — a mega trade deal involving China, the ASEAN region, Australia, and New Zealand — over concerns of a surge in Chinese imports in 2019, India began looking to the lucrative West for deeper economic integration. Post-2019, when India adopted a decisive approach towards a free trade agreement with the UK, a political crisis in London played spoilsport, beginning with Brexit in 2016. While negotiations continued under three different British Prime Ministers from 2022 to 2025, several deadlines were missed, including the Diwali deadline set by former UK Prime Minister Boris Johnson. The deal only materialised after the Keir Starmer-led Labour Party won a landslide victory in May 2025. Another political push towards global deals was the election of US President Donald Trump. It incentivised countries to swiftly secure new markets, bringing the UK and India even closer to find certainty in a world that seems to be moving towards trade turmoil. The India-UK deal will help integration of the advanced services sector between the two nations. It will also enable access for high-end British cars and whisky into India in a phased manner. The India–UK FTA is expected to ensure comprehensive market access for goods across all sectors, covering all of India's export interests. India will benefit from tariff elimination on approximately 99 per cent of tariff lines, covering nearly 100 per cent of trade value — offering opportunities to boost bilateral trade between India and the UK, according to the Commerce and Industry Ministry. The pact includes chapters on goods, services, innovation, government procurement, and intellectual property rights. The two countries have also concluded negotiations on the Double Contribution Convention Agreement, or social security pact, which would help avoid double contributions to social security funds by Indian professionals working for a limited period in Britain. However, talks on the Bilateral Investment Treaty (BIT) are still ongoing. Government officials have pointed out that the India–UK trade deal is also significant as it is one of the most comprehensive free trade agreements that India has entered into so far and could serve as a template for future engagements, including the multiple trade deals currently under negotiation — such as the complex agreement with the European Union. The Ministry stated that the UK FTA will ease mobility for professionals, including contractual service suppliers; business visitors; investors; intra-corporate transferees; partners and dependent children of intra-corporate transferees with the right to work; and independent professionals such as yoga instructors, musicians, and chefs. India's exports to the UK rose by 12.6 per cent to $14.5 billion, while imports grew by 2.3 per cent to $8.6 billion in 2024–25. Bilateral trade between India and the UK increased to $21.34 billion in 2023–24 from $20.36 billion in 2022–23. Ravi Dutta Mishra is a Principal Correspondent with The Indian Express, covering policy issues related to trade, commerce, and banking. He has over five years of experience and has previously worked with Mint, CNBC-TV18, and other news outlets. ... Read More
News18
an hour ago
- Business
- News18
Leather, Pharma & Engineering Goods: Which Sectors Will Gain Most From UK-India Trade Deal?
India stands to benefit from the duty elimination of tariffs on approximately 99 per cent of tariff lines, covering nearly 100 per cent of the trade value After over three years of intense negotiations, India and the United Kingdom set to sign the Free Trade Agreement (FTA) on Thursday when Prime Minister Narendra Modi visits London. The Comprehensive Economic and Trade Agreement (CETA), more commonly referred to as FTA, ensures comprehensive market access for goods across most sectors, fully addressing India's export interests. India stands to benefit from the duty elimination of tariffs on approximately 99 per cent of tariff lines, covering nearly 100 per cent of the trade value. This opens up significant opportunities to boost bilateral trade between India and the UK. In key labour-intensive sectors, duties have been reduced to zero from previously high levels—up to 20 per cent on marine products, 12 per cent on textiles and clothing, 8 per cent on chemicals, and 10 per cent on base metals. In the processed food sector, tariffs on 99.7 per cent of lines have been slashed from as high as 70 per cent to zero, offering a major boost for Indian exporters. The India–UK CETA offers a transformative opportunity for business across key sectors such as agriculture, food processing, chemicals, pharmaceuticals, textiles, engineering goods, electronics, and marine. By opening access to the UK's import market, the CETA reduces compliance costs and time-to-market, enhancing competitiveness for Indian exporters. Agriculture and allied sectors stand out as a major beneficiary, with Indian farmers gaining market access for high-value products like vegetables, fruits, basmati rice, cereals, animal products, beverages, oil seeds, and dairy. This directly supports India's ambitious goal of achieving $100 billion in agri exports by 2030. Importantly, the FTA also puts in place protections to ensure that Technical Barriers to Trade (TBT) and Sanitary and Phytosanitary (SPS) measures do not lead to unjustified trade restrictions. Additionally, the marine sector, particularly Indian fishermen, will benefit from access to a UK market valued at over $5.4 billion. By improving predictability, reducing trade risks, and promoting digital transformation and cross-border innovation, the FTA builds lasting commercial trust and marks a significant milestone in deepening Indo-UK economic cooperation. MSMEs are poised for a strong uplift through duty-free access in labour-intensive sectors such as leather, textiles, gems & jewellery, furniture, and sports goods—areas where UK imports exceed $23 billion. The FTA further enhances their global competitiveness through bilateral cooperation in trade finance, training, partner identification, and transparent payment practices. India's MSMEs—from family-owned weaving units and apparel manufacturers in Tirupur to artisanal clusters in Panipat, Bhadohi, and Agra—form the backbone of India's textile and leather exports. The FTA opens duty-free access for these sectors—leveling the playing field for Indian exporters against competitors like Bangladesh, Pakistan, and Cambodia. There also exists a significant potential in the chemicals and pharmaceuticals sector. Indian manufacturers will be able to expand their footprint in the UK, driving growth in both bulk and specialty chemicals, as well as high-quality, affordable generics and innovative pharma products. This strategic opening will not only boost exports but also foster deeper R&D collaboration, making India a key partner in strengthening the UK's healthcare and industrial value chains. Here's how different sectors stand to gain: TEXTILES Zero Duty market access for the textiles and clothing sector accounts for 1,143 tariff lines, contributing 11.7 per cent. This reflects the rich variety of textile and apparel goods in trade and their traditional significance in both domestic manufacturing and export orientation. The FTA eliminates the tariff on textile imports from India, thereby enhancing our competitiveness. In textiles and clothing, while the UK's total imports ($26.95 billion) are lower than India's global exports ($36.71 billion), India still supplies only $1.79 billion to the UK. With the FTA promising duty-free access and removal of trade barriers, this sector is also well-positioned to increase its footprint. The sectors poised for exponential growth include Ready-made Garments, Home Textiles, Carpets, and Handicrafts, where the removal of duties creates immediate and substantial competitive advantages. India is expected to gain at least 5 per cent additional market share in the UK within 1 to 2 years, outperforming competitors like Vietnam, Indonesia, Cambodia, Turkey and Bangladesh, particularly in the value-conscious UK retail and brand segment. Conservative estimates project exports of leather goods and footwear from India to the UK could exceed $900 million, marking a substantial leap forward. In the longer run, India is well-positioned to become one of the top three suppliers to the UK in these sectors. AGRICULTURAL PRODUCTS The agriculture sector accounts for 1,437 tariff lines, which constitutes 14.8 per cent of all product tariff lines. This indicates a significant presence of agriculture in the trade structure, reflecting the diversity and importance of agri-based goods in tariff regulation. In agriculture, India exports $36.63 billion globally, while the UK imports $37.52 billion, but imports just $811 million from India, revealing room for growth in high-value agri products. The UK is a high-value market for niche Indian agri-products such as tea, mangoes, grapes, spices, marine products, etc, and the CETA will allow Indian farmers to fetch premium prices for these products in the UK market. The India-UK FTA will deliver a seismic shift, granting Indian agri-products parity with major EU exporters like Germany and Netherlands, who currently enjoy zero tariffs. Duty-free access across key categories will raise agri exports by over 20 per cent in the next three years. India will also be able to outcompete major global players in crucial segments such as fresh grapes, processed food preparations, bakery items, preserved vegetables, fruits, and nuts, fresh/chilled vegetables, sauces and prepared sauces. MARINE PRODUCTS The UK is a high-value consumer of Indian frozen seafood, especially shrimp and white fish, due to the large Indian diaspora and demand for processed seafood. The CETA eliminates UK tariffs, improving the price realisation for Indian exporters, benefits that flow down to coastal fisherfolk through higher procurement rates. Coastal states like Kerala, Andhra Pradesh, Gujarat, Tamil Nadu, and Odisha stand to benefit significantly from export-led job creation. Despite the UK's $5.4 billion marine import market, India's share remains at just 2.25 per cent, underscoring a significant untapped export opportunity. FOOD PROCESSING Comprising 985 tariff lines, the food processing sector holds a 10.1 per cent share. This sector includes processed agricultural and food products, highlighting its value-added role within the broader agri-food supply chain. The food processing sector also shows opportunity as India exports $14.07 billion globally, while the UK imports $50.68 billion, but Indian products make up just $309.5 million. PLANTATIONS SECTOR UK already represents a significant market for India, absorbing 1.7 per cent of coffee, 5.6 per cent of tea, and 2.9 per cent of spice exports, now primed for exponential growth with duty free access on these products. Duty-free access on instant coffee will help Indian businesses compete with other European suppliers of Instant/value added coffee such as Germany, Spain, Netherlands. INDIAN OILSEEDS AND PRODUCE The UK market can provide a new avenue for Indian Oilseed exporters to reach a broader consumer base and expand their market share. With reduced tariffs and streamlined procedures, Indian Oilseed exporters can become more competitive in the UK market, potentially leading to higher exports. ENGINEERING GOODS The engineering goods sector has the highest share among the listed sectors with 1,659 tariff lines, making up 17.0 per cent of the total. This indicates a broad variety of engineering-related items—machinery, components, and equipment—under tariff coverage, underscoring its importance in industrial and trade dynamics. With tariff elimination (as high as 18 per cent) under the FTA, engineering exports to the UK could nearly double in the next five years, reaching over $7.5 billion by 2029-30. ELECTRONICS AND SOFTWARE Zero-duty access is expected to accelerate exports of electronic products, with smartphones, optical fiber cables, and inverters set to strengthen India's foothold in UK market. Ambitious UK commitments for Software and IT-enabled services, meanwhile, will unlock new markets, drive job creation, and enhance export potential for Indian software firms. PHARMACEUTICALS The pharma sector has only 56 tariff lines, which is just 0.6 per cent of the total. Despite its relatively small representation in terms of tariff lines, the pharmaceutical sector typically holds high value and strategic importance, especially in global trade. The zero tariff provisions under the FTA are expected to significantly enhance the competitiveness of Indian generics in the UK market, which remains India's largest pharmaceutical export destination in Europe. Significant share of medical devices like surgical instruments, diagnostic equipments, ECG machines, X-Ray systems will not attract any duty. This will reduce costs for Indian med-tech companies and make their products more competitive in the UK market. CHEMICALS With 1,206 tariff lines, the chemicals and allied sector contributes 12.4 per cent to the total. This includes products like fertilisers, industrial chemicals, and petrochemicals, emphasising its substantial role in trade classification and policy. The FTA is anticipated to trigger a dramatic 30 per cent-40 per cent increase in India's chemical exports to the UK, propelling figures to an estimated USD 650-750 million in the upcoming fiscal year 2025-26. PLASTICS Duty-free access presents an opportunity to tap into the UK's robust demand for plastics—films, sheets, pipes, packaging, tableware, and kitchenware—segments where India has proven manufacturing strength. It also allows India to better compete with UK's major import sources such as Germany, China, the United States, the Netherlands, Belgium, and France. SPORTS GOODS AND TOYS The projected growth is 15 per cent and the target for next five years for the calendar year 2030 is $186.97 million. Exports of soccer balls, cricket gear, rugby balls, and non-electronic toys is set to increase. top videos View all GEMS & JEWELLERY India's total G&J exports to UK are valued at $941 million, with $400 million coming from jewellery. The FTA opens up a huge market as UK imports approximately $3 billion worth of jewellery annually. Tariff relaxations under the FTA are projected to double India's gems and Jewellery exports to the UK within the next 2-3 years. About the Author News Desk The News Desk is a team of passionate editors and writers who break and analyse the most important events unfolding in India and abroad. From live updates to exclusive reports to in-depth explainers, the Desk More Stay updated with all the latest business news, including market trends, stock updates, tax, IPO, banking finance, real estate, savings and investments. Get in-depth analysis, expert opinions, and real-time updates—only on News18. Also Download the News18 App to stay updated! tags : Food processing gems and jewellery India-UK Trade Deal leather view comments Location : New Delhi, India, India First Published: July 24, 2025, 11:35 IST News business Leather, Pharma & Engineering Goods: Which Sectors Will Gain Most From UK-India Trade Deal? Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
New Indian Express
2 hours ago
- Business
- New Indian Express
India–UK Free Trade Agreement: Sector and product-wise impacts
CHENNAI: India and the United Kingdom are set to sign a landmark Free Trade Agreement (FTA) on July 24, 2025, during Prime Minister Narendra Modi's official visit to London. This is India's first major bilateral trade deal with a developed economy in over a decade. The agreement follows nearly three years of negotiations and is expected to come into force within a year, pending approvals from the UK Parliament and India's Union Cabinet. Here's a list of important tariff reductions and concessions on goods and services agreed upon by both countries: Key Tariff Changes Alcoholic beverages: Import duties on Scotch whisky and gin will drop from 150% to 75% immediately, and to 40% over the next 10 years. Automobiles: Tariffs on UK-manufactured cars, which currently exceed 100%, will be cut to 10% under a quota-based system. Other goods: India will reduce or eliminate tariffs on products like cosmetics, salmon, chocolates, biscuits, and medical devices. India Gains Almost 99% of Indian goods will get duty-free access to the UK market. This includes products from sectors like textiles, footwear, gems and jewellery, auto components, machinery, chemicals, sports goods, furniture, and pharmaceuticals. Textiles and apparel: Current UK tariffs of 8–16% will be eliminated. This is expected to boost exports from key textile hubs like Tiruppur, Surat, and Ludhiana. Beneficiary companies will be Welspun India, Arvind Ltd. Footwear: Zero-duty access will benefit manufacturers in Agra, Kanpur, and Chennai. This will benefit companies like Bata India and Relaxo. Automobiles and electric vehicles: Indian EV and hybrid carmakers like Tata Motors and Mahindra Electric will benefit from reduced import tariffs and preferential quotas. Gems and jewellery: Removal of UK duties (up to 16%) will aid exporters, particularly from Gujarat and Maharashtra. Auto components and engineering goods: Zero tariffs to benefit companies like Bharat Forge. Pharmaceuticals and medical devices: Improved access for Indian pharma companies to the UK market. Furniture, toys, sports goods, chemicals, and machinery: Reduced or zero tariffs will provide an export boost to these sectors. UK Gains Alcohol and luxury goods: UK-based firms like Diageo (Scotch whisky) and luxury carmakers such as Aston Martin and Jaguar Land Rover (owned by Tata Motors) will gain improved market access in India. Automobiles: British luxury vehicles will enter India under a lower-tariff quota system. Professional access to UK: Indian professionals including yoga instructors, chefs, musicians, and other service providers will have easier short-term entry to the UK. Social security relief: Indian professionals on temporary assignments in the UK will be exempt from paying social security contributions for up to three years, with estimated annual savings of ₹4,000 crore. Government procurement: UK companies can bid on Indian federal government tenders worth over ₹200 crore in non-sensitive sectors. This opens access to around ₹4.09 lakh crore in annual tenders. Macroeconomic Projections According global trade experts, this India–UK FTA marks a significant milestone in bilateral trade, offering major tariff concessions, enhanced market access, and new opportunities in services and public procurement. And it is expected to boost exports, attract investment, and strengthen economic ties between the two countries across strategic sectors. UK government estimates the FTA will increase its GDP by £4.8 billion annually. Indian exports to the UK are expected to double by 2030. Currently, over 1,000 Indian firms operate in the UK, employing over 1 lakh people and investing about $20 billion. The UK has so far invested close to $36 billion in India, making it the sixth-largest foreign investor.
Mint
2 hours ago
- Business
- Mint
Modi in London: ‘Major win' for jobs and growth, says Keir Starmer on 'landmark' India-UK trade deal
PM Modi in London: British Prime Minister Keir Starmer said on Thursday that the 'landmark' Free Trade Agreement (FTA) that he is set to sign with his Indian counterpart, Narendra Modi, is a 'major win' for jobs and growth, as tariff cuts will lower prices on clothes, shoes, and food products. In a statement ahead of his much-anticipated bilateral talks with Modi at his country residence of Chequers on Thursday, Starmer also announced that nearly GBP 6 billion in new investment and export developments had been clinched as Indian firms expand their operations in the UK and British companies secure new business opportunities in India. The two leaders are also set to sign a renewed Comprehensive and Strategic Partnership, which will see closer collaboration on defence, education, climate, technology and innovation. 'Our landmark trade deal with India is a major win for Britain,' said Starmer. PM Modi landed in London on Wednesday, local time to expand bilateral ties in defence, trade, and technology. The formalisation of the landmark India-UK free trade deal is set to be a major outcome of his trip. PM Modi will hold wide-ranging talks with Starmer, today. The talks are expected to focus on imparting new momentum in the strategic ties between the two countries. 'It will create thousands of British jobs across the UK, unlock new opportunities for businesses and drive growth in every corner of the country, delivering on our Plan for Change,' Starmer added. 'We're putting more money in the pockets of hardworking Brits and helping families with the cost of living, and we're determined to go further and faster to grow the economy and raise living standards across the UK,' said Starmer. According to the UK Department for Business and Trade (DBT), once the FTA comes into force, India's average tariff on UK products will drop from 15 per cent to 3 per cent. This will make it easier for British companies to sell products to India, from soft drinks and cosmetics to cars and medical devices. Whisky producers will benefit from tariffs slashed in half, reduced immediately from 150 per cent to 75 per cent and then dropped even further to 40 per cent over the next 10 years – giving the UK an advantage over international competitors in reaching the Indian market, the DBT said. 'The billions brought to our economy from the trade deal signed today will reach all regions and nations of the UK so working people in every community can feel the benefits,' said UK Business and Trade Secretary Jonathan Reynolds. 'The almost GBP 6 billion in new investment and export wins announced today will deliver thousands of jobs and show the strength of our partnership with India as we ensure the UK is the best place in the world to invest and do business,' he said. Official statistics show the UK already imports GBP 11 billion in goods from India, with liberalised tariffs set to make it easier and cheaper to acquire products. For businesses, this could mean potential savings when importing components and materials used in areas such as advanced manufacturing or luxury and consumer goods. New analysis published along with the FTA claims in every region of the United Kingdom will benefit from an estimated GBP 4.8 billion increase to UK GDP each year in the long term. Sectors in the spotlight include manufacturing, set to benefit from tariff cuts on aerospace (11 per cent reduced to 0), automotives (110 per cent down to 10 per cent under a quota) and electrical machinery (down from 22 per cent down). Tariff cuts combined with a reduction in regulatory barriers to bilateral trade are estimated to increase UK exports to India by nearly 60 per cent in the long run – equivalent to an additional GBP 15.7 billion of UK exports to India when applied to projections of future trade in 2040, the DBT said. The official figures forecast an increase in bilateral trade by nearly 39 per cent in the long run, equivalent to GBP 25.5 billion a year, when compared to 2040 projected levels of trade in the absence of an agreement. The clean energy industry will have 'brand new, unprecedented access' to India's vast procurement market as the country makes the switch to renewable energy and continues to see growing energy demand. 'For financial and professional business services, locked in access will offer certainty to expand in India's growing market and measures such as binding India's foreign investment cap for the insurance sector, ensuring UK financial services companies are treated on an equal footing with domestic suppliers,' the DBT said. Meanwhile, 26 British companies are said to have secured new business in India, with Airbus and Rolls-Royce set to soon begin delivering Airbus aircraft – with over half powered by Rolls-Royce engines. The billions brought to our economy from the trade deal signed today will reach all regions and nations of the UK.
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Business Standard
2 hours ago
- Business
- Business Standard
India, UK to ink FTA today: Trade, defence, energy on Modi-Starmer agenda
India and the United Kingdom are set to sign a historic Free Trade Agreement (FTA) on Thursday during Prime Minister Narendra Modi's official visit to the country. The FTA is expected to deepen economic ties between the two nations while also setting the stage for an ambitious new roadmap — the UK-India Vision 2035 — that expands cooperation well beyond trade. The signing will take place at Chequers, the official country retreat of British Prime Minister Keir Starmer, marking a key milestone in India-UK relations. What the Free Trade Agreement offers The FTA aims to enhance bilateral trade by £25.5 billion annually and is being described as India's most comprehensive trade pact ever and the UK's most significant since Brexit. It will sharply reduce tariffs, ease market access for key goods and services, and offer benefits to both consumers and businesses. Tariff reductions will make British goods like whisky, gin, cars, cosmetics, and medical devices more affordable in India. At the same time, Indian exports such as textiles, leather, marine products, and jewellery will enjoy easier access to the UK market. PM Modi's UK visit agenda Prime Minister Narendra Modi arrived in the UK on Wednesday as part of his July 23-26 trip that also includes a visit to the Maldives. On Thursday, July 24, PM Modi will meet his counterpart Keir Starmer at Chequers. The trade pact will be signed in the presence of both leaders by India's Commerce Minister Piyush Goyal and UK Business and Trade Secretary Jonathan Reynolds. Ahead of his departure, PM Modi said, 'India and the UK share a Comprehensive Strategic Partnership that has witnessed significant progress in recent years.' Vision 2035: Beyond trade The India-UK Vision 2035 roadmap aims to broaden ties across multiple areas: -A new defence industrial roadmap -Joint action on climate change and renewable energy -Stronger border security cooperation -Deeper education and research partnerships Calling the agreement a 'major win for Britain", Starmer said, 'It will create thousands of British jobs, unlock new opportunities, and help families with the cost of living.' India-UK FTA: Sectors that will gain the most Indian exports likely to benefit: -Leather, textiles and apparel -Toys and sports goods -Gems and jewellery -Marine products British goods to see tariff cuts: -Whisky and gin (from 150 per cent to 40 per cent in 10 years) -Automobiles (from over 100 per cent to 10 per cent, under a quota system) -Chocolates, cosmetics, medical devices -Machinery and aerospace parts The clean energy sector in the UK is also expected to gain access to India's vast procurement market, which is critical as India expands its renewable energy push. The FTA also includes a 'double contribution convention' that exempts Indian workers and firms from UK social security payments for three years. Indian businesses will also gain entry into Britain's public procurement sectors, such as transport, healthcare, and energy. Meanwhile, British companies investing in India may receive priority under India's 'Make in India' policy. India-UK FTA today: What is excluded? India has protected certain sensitive sectors, especially agriculture. Products like apples and dairy items have been kept out to safeguard domestic farmers. Tariff reductions on whisky and automobiles will follow a phased schedule, with cars coming under a managed quota regime. What happens after the deal is signed? After today's signing, the FTA will require approval from the Union Cabinet and ratification by the British Parliament. Full implementation could take up to a year. Both nations are aiming to double bilateral trade to $120 billion by 2030. As India's middle class expands and its import demand grows, the agreement is set to play a crucial role in shaping future economic relations.
