How Different Sectors are Likely to Impact After India–UK Free Trade Agreement?

India and the United Kingdom have successfully closed negotiations on a landmark Free Trade Agreement (FTA), marking a pivotal moment in their expanding economic relationship. This is the first comprehensive trade pact between the two nations and is poised to significantly boost bilateral trade, with a shared goal of doubling trade volumes to $120 billion by 2030.

In 2023–24, bilateral trade between the two countries reached $21.34 billion, up from $20.36 billion in the previous fiscal year. Currently, the average tariff on Indian goods entering the UK stands at 4.2%, a barrier the FTA seeks to dismantle. In this read, we will explore the sector wide impact of the India-UK FTA.

Sector-Wise Impact

Information Technology and Professional Services

The FTA facilitates easier entry for Indian IT firms and professionals, expected to benefit over 60,000 IT workers annually. Enhanced mobility and market access will particularly support companies such as TCS, Infosys, Tech Mahindra, HCL Technologies, and Wipro.

Textiles and Apparel

With tariff barriers removed, Indian textile and garment manufacturers will enjoy improved competitiveness in the UK. Likely beneficiaries include Vardhman Textiles, KPR Mill, Welspun India, Gokaldas Exports, Raymond, and Page Industries.

Gems and Jewellery

Indian exporters of diamond and gold jewellery will gain enhanced access to the UK’s premium market. Major winners include Titan Company (Tanishq), Vaibhav Global, Rajesh Exports, and Kalyan Jewellers.

Key Highlights of the FTA

Double Contribution Convention

A standout feature of the deal is the introduction of the double contribution exemption, which has been widely praised for its positive impact on Indian professionals working in the UK. It exempts short-term Indian workers from paying UK social security contributions, reducing their financial burden.

Market Access and Tariff Elimination

Indian exporters will gain tariff-free access to one of the world’s most lucrative markets. Sectors that are labour- and technology-intensive are expected to benefit the most from this development.

Professional Mobility & Regulatory Cooperation

The agreement includes streamlined mobility provisions for Indian professionals and measures for regulatory alignment, offering smoother market entry and reduced compliance costs.

Conclusion

This historic FTA between India and UK not only enhances trade flows but also strengthen deeper strategic alignment between the two nations, paving the way for long-term economic collaboration across critical industries.

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