India-UK trade deal: The India-UK trade deal is being seen as a historic milestone in the trade relations between the two countries. The most significant number that jumps out is – 99% of India’s exports to the US now get a zero tariff or duty-free access to the United Kingdom markets!The trade deal or free trade agreement (FTA) is also particularly important since it comes at a time when US President Donald Trump’s newly established trade order is disrupting the global economy.At the signing of the deal, PM Narendra Modi said Modi Indian goods including textiles, jewellery, agricultural products and engineering goods would get better access to the UK market. “This isn’t merely paving the way for economic partnership but is also a blueprint for our shared prosperity,” Modi said.“The UK-India deal is now signed, sealed and ready to be delivered,” UK PM Keir Starmer said, delivering a statement alongside Modi. He said it would bring “huge benefits to both of our countries,” boosting wages, raising living standards and bringing down prices to consumers.

British Imports More From India Than It Exports

The bilateral trade between the nations reached $21.9 billion in 2024, with projections indicating the agreement will enhance annual bilateral trade by £25.5 billion over the long term.The agreement stipulates that 90% of tariff lines will see reductions for British exports to India, with 85% becoming completely tariff-free within ten years. For India, approximately 99% of tariff lines for goods exported to Britain will see tariffs at zero.The agreement includes provisions to reduce levies on spirits, with whisky and gin duties decreasing to 75% initially, then to 40% by the tenth year. Additionally, automotive sector tariffs will decrease from 110% to 10% under a quota system during this period.1. 99% Duty Free AccessIndia is set to gain from 99% duty free access to the UK market – which covers nearly all of the trade value with the United Kingdom!Key labour-intensive sectors—marine, textiles, chemicals, base metals—will now enjoy zero duties, down from rates as high as 20%. In processed foods, tariffs on 99.7% of lines, once as steep as 70%, have been scrapped. India also secures duty-free access for sectors like rubber, plastics, auto, tea, coffee, and spices. Meanwhile, the UK will benefit from India’s tariff cuts on aerospace, automobiles, and electrical machinery, with reductions ranging from 11% to 110% down to minimal levels.Also Read | India-UK trade deal: How will the Free Trade Agreement benefit India? Top 10 takeaways for Indians2. Agriculture:Many agricultural and processed foods, including fruits, vegetables, cereals, spices like turmeric and pepper, and items like mango pulp, pickles, and pulses will get duty-free access to the UK.Over 95% of tariff lines will be duty free, which is likely to boost agri exports by over 20% in three years. This will support India’s goal of $100 billion agri-exports by 2030. The FTA also opens new markets for India for agri commodities such as jackfruit, millets, and organic herbs.It protects India’s sensitive sectors like dairy, apples, oats, and edible oils.3. MarineThere will be no tariffs for India’s marine products which creates a $5.4 billion marine export opportunity for India. India currently has just a 2.25% share. Tariff removal on key items like shrimp, tuna, fishmeal, and feeds—previously taxed between 4.2% and 8.5% will help India. 4. TextilesIndia’s textiles and clothing sector get duty-free access across 1,143 product categories. This does away with the disadvantage on tariff front that India had with countries like Bangladesh and Cambodia. This move enhances India’s competitiveness in a UK market that imports $26.95 billion worth of textiles annually, yet currently sources just $1.79 billion from India.Key sectors such as ready-made garments, home textiles, carpets, and handicrafts are set for exponential growth. With duties removed, India is expected to gain at least 5% more market share in the UK within the next one to two years.

India-UK Trade Deal

5. EngineeringIndia’s engineering exports to the UK will likely surge with duty-free access. Even though India exports $77.79 billion worth of engineering goods globally and the UK imports $193.52 billion, only $4.28 billion is sourced from India. With tariffs (up to 18%) gone, exports could nearly double to over $7.5 billion by 2029-30.6. PharmaIndia exports only around $1 billion pharmaceutical products to the UK, even though the latter’s imports are nearly $30 billion. The FTA does away with tariffs on generics, enhancing their competitiveness in the UK, which is India’s largest pharmaceutical market in Europe.Additionally, medical devices such as surgical instruments, diagnostic equipment, ECG machines, and X-ray systems will now enjoy zero-duty access, making Indian products more cost-effective and attractive in the UK market.7. Chemicals and plasticsIndia’s chemical exports to the UK may rise by 30–40%, estimated to reach $650–750 million in 2025–26.While India’s global chemical exports are more than $40.5 billion and the UK imports $35.1 billion worth, India currently captures just $843 million—leaving ample room for growth. In plastics, duty-free access opens up strong opportunities in high-demand segments like films, sheets, pipes, and kitchenware, helping India compete with key global suppliers. With a projected 15% growth, India aims to raise plastics exports to $186.97 million over the next five years.Also Read | India-UK trade deal signed: Landmark multi-billion dollar free trade agreement sealed during PM Modi’s visit; all about the FTA8. Toys, gems & jewelleryIndia’s sports goods exports like soccer balls, cricket gear, rugby balls, and non-electronic toys will grow, boosting competitiveness against countries like China and Vietnam. Gems and jewellery exports, which currently stand at $941 million, are projected to double in 2–3 years as the FTA opens access to the UK’s $3 billion jewellery market.9. LeatherIn leather and footwear, the removal of 16% tariffs aims to drive exports past the $900 million mark. This will add 5% market share in 1–2 years, and benefit MSME hubs like Agra, Kanpur, Kolhapur, and Chennai.10. What it means for Indian professionalsThe FTA provides a new edge for India’s young professionals by exempting 75,000 Indian workers from UK social security payments for three years. It grants access to 36 service sectors without an Economic Needs Test for Indian firms and freelancers.Importantly, Indian professionals can now work in as many as 35 UK sectors for up to 2 years, even without the need for a local office. Also, over 1,800 chefs, yoga experts, and musicians will be allowed to work in the UK annually, opening new doors for cultural and professional exchange.Also Read | Donald Trump’s aggressive trade moves: US President indicates he won’t go below 15% tariff rate; ‘we’ll have a straight…’