Mumbai: The India-UK Free Trade Agreement, which eliminates tariffs on 99 per cent of Indian exports to the UK and 90 per cent of UK exports to India, will unlock 25.5 billion pounds in additional trade value, according to UK Trade Commissioner for South Asia Harjinder Kang.
Participating in a panel discussion here, he said: “This agreement is not just a trade deal; it is a blueprint for the next chapter of UK-India economic cooperation. With 43 billion pounds in existing trade and 25.5 billion pounds in incremental upside, it opens doors to real gains for manufacturers and services providers alike.”
Kang, who is also the Deputy High Commissioner for Western India, revealed the next steps: legal scrubbing, Prime Ministerial signing, parliamentary ratification (expected in 9–12 months), and staggered implementation. He affirmed that services liberalisation, auto tariffs (with quotas), and “a future-ready tech-security corridor” were built into the agreement, with potential expansion into sectors like pharma, semiconductors, and green tech.
Detailing the contours of the FTA, he said that under the India-UK FTA, 99 per cent of Indian goods to the UK and 90 per cent of UK goods to India will become tariff-free.
The UK’s peak tariff on whisky will reduce from 150 per cent to 40 per cent over 10 years. The CBAM (carbon border adjustment mechanism) is not part of the India–UK FTA, reassuring Indian industry that carbon taxes will not affect bilateral trade terms under this agreement, he explained.
There will also be a significant liberalisation in services under the FTA, with 36 sectors under Contractual Service Suppliers and 16 under Independent Professionals, including IT, R&D, chefs, yoga instructors, and musicians.
Alongside the FTA, the UK and India have agreed to negotiate a reciprocal DCC, which will mean employees temporarily working in the other country for up to three years will continue paying social security contributions only in their home country, Kang added.
According to Amisha Vora, Chairperson & MD, PL Capital, 72 per cent of India’s exports to the UK – including electronics, fuels, chemicals, textiles, and apparel – run a trade surplus, positioning sectors like auto components, engineering goods, and textiles for a meaningful upside.
Emphasising the FTA’s services dimension at a panel discussion, she highlighted India’s $18 billion in services exports to the UK, the second-largest after the US, and underscored the increased mobility for Indian IT, creative, and professional talent as a soft power and services export amplifier.
From a macro lens, she framed the deal as reflective of two decisive shifts: Britain’s post-Brexit diversification away from China toward democratic demand, and India’s effort to anchor deeper into rules-based, like-minded economies without ceding regulatory sovereignty.
Anuj Agarwal, chief economist at Welspun Group, highlighted the opportunity in the textiles sector: “The sector is 2.3 per cent of India’s GDP, 12–13 per cent of industrial output, and employs 45 million people. But our UK exports are only $1.5 billion—far below Bangladesh and Vietnam. This FTA gives India a fair shot at reclaiming its share. The tariff timelines will determine the pace of investment response. However, if the reductions are staggered too long, industry excitement may mellow down.”
(IANS)
