In a landmark move, India and the UK have officially signed a Free Trade Agreement (FTA) that is set to revolutionise bilateral trade. The deal, inked during PM Narendra Modi’s UK visit, is poised to boost trade by $34 billion annually, slashing tariffs and opening doors for exporters and consumers alike.
UK Imports Just Got Cheaper for Indians
If you love British brands, get ready for a big price cut. Under the FTA, India will reduce tariffs on 90% of UK products, including:
- Scotch whisky: Duty cut from 150% to 75% now, and 40% over 10 years
- Electric Vehicles: Tariff slashed from 110% to just 10% under a quota
- Medical devices: Lower tariffs make quality healthcare more accessible
Chocolates, cosmetics, biscuits, lamb, salmon, and soft drinks to become more affordable. Average tariffs on UK goods will drop from 15% to 3%, making premium products more accessible to Indian consumers.
India Gets Duty-Free Access to the UK
A huge win for Indian exporters, 99% of India’s exports to the UK will now enjoy zero-duty access, benefiting:
- Engineering goods: India’s biggest export category to the UK, with potential to soar
- Chemicals and petrochemicals: Projected to grow 30–40% to reach $750 million
- Pharmaceuticals: India to tap into UK’s $30 billion import market for generics
- Processed foods and agri products: Instant coffee, tea, and spices to compete with European suppliers
- Electronics: Mobile phones, inverters, and fibre optics to gain new ground
- Jewellery: Exports may double as India eyes UK's $3 billion market
- Marine exports: Import duties up to 20% to drop to zero
The India-UK Free Trade Agreement brings a significant boost to Indian professionals looking to work in the UK. One of the most impactful provisions is the exemption from UK social security contributions for Indians staying in Britain for up to three years. This move alone is expected to save Indian workers and companies nearly ₹4,000 crore annually.
The FTA also opens doors for up to 1,800 Indian chefs, yoga instructors, and classical musicians to offer their services in the UK on a temporary basis, expanding cultural and professional exchange.
In total, over 75,000 Indian professionals working in the UK are expected to benefit from the social security exemption under the Double Contribution Convention, making it easier and more cost-effective for them to live and work abroad.
UK’s Big Win: India’s Government Procurement Market
The UK will gain access to India’s public procurement market for non-sensitive tenders above ₹2 crore, covering over 40,000 tenders annually worth more than ₹4 lakh crore.