The recently signed Free Trade Agreement (FTA) between India and the United Kingdom is expected to enhance bilateral trade, with projected annual growth of around 15 per cent until calendar year 2030, according to a report by credit rating and research agency CareEdge.
India and the UK signed the FTA on May 6, 2025, concluding nearly three years of negotiations aimed at deepening economic cooperation. Under the terms of the agreement, India will reduce tariffs on 90 per cent of British goods, with 85 per cent becoming completely duty-free over a span of ten years. In return, the UK will eliminate tariffs on several Indian products, enabling 99 per cent of India’s exports to the UK to face zero duties.
“Once the FTA is effective, the trade value between these two economies is expected to increase by around 15% annually until CY30, factoring in the aspect that the FTA will come into effect in a year,” CareEdge noted in its report as quoted news agency PTI.
Currently, trade with the UK constitutes approximately 2 per cent of India’s total trade volume—a relatively modest figure considering the economic scale and potential of both nations. Despite this, bilateral trade has maintained a consistent upward trajectory over recent years, supported by a compound annual growth rate (CAGR) of 10–12 per cent.
The report pointed out that trade volumes had dipped in 2020 and 2021 due to global headwinds, including the COVID-19 pandemic, Brexit-induced disruptions, and a broader global recession. However, the FTA is expected to reenergize trade by removing tariff barriers and simplifying cross-border business.
CareEdge estimates that, with the FTA in place, India’s exports to the UK could reach approximately GBP 45 billion by 2030, while imports from the UK are projected to grow to GBP 30 billion over the same period.
The report highlights several advantages for Indian exporters, including improved market access, more stable and reliable supply chains, enhanced competitiveness, and increased export volumes. It added, “The FTA is expected to boost India's exports by significantly reducing tariffs, easing trade barriers leading to improved market access and make Indian products more price competitive, thereby increasing their demand in the UK.”
Furthermore, the agreement comes as a relief for Indian exporters facing subdued sales and ongoing concerns over possible reciprocal tariffs from the United States.
According to the agreement, 99 per cent of Indian tariff lines—representing nearly the entire trade value—will receive duty-free access to the UK market. At present, most Indian goods exported to the UK are subject to import duties ranging between 4 per cent and 18 per cent.
The FTA is expected to unlock new export potential in key Indian sectors including textiles, marine products, leather, footwear, sports goods and toys, gems and jewellery, engineering goods, auto parts, and organic chemicals.
India and the UK signed the FTA on May 6, 2025, concluding nearly three years of negotiations aimed at deepening economic cooperation. Under the terms of the agreement, India will reduce tariffs on 90 per cent of British goods, with 85 per cent becoming completely duty-free over a span of ten years. In return, the UK will eliminate tariffs on several Indian products, enabling 99 per cent of India’s exports to the UK to face zero duties.
“Once the FTA is effective, the trade value between these two economies is expected to increase by around 15% annually until CY30, factoring in the aspect that the FTA will come into effect in a year,” CareEdge noted in its report as quoted news agency PTI.
Currently, trade with the UK constitutes approximately 2 per cent of India’s total trade volume—a relatively modest figure considering the economic scale and potential of both nations. Despite this, bilateral trade has maintained a consistent upward trajectory over recent years, supported by a compound annual growth rate (CAGR) of 10–12 per cent.
The report pointed out that trade volumes had dipped in 2020 and 2021 due to global headwinds, including the COVID-19 pandemic, Brexit-induced disruptions, and a broader global recession. However, the FTA is expected to reenergize trade by removing tariff barriers and simplifying cross-border business.
CareEdge estimates that, with the FTA in place, India’s exports to the UK could reach approximately GBP 45 billion by 2030, while imports from the UK are projected to grow to GBP 30 billion over the same period.
The report highlights several advantages for Indian exporters, including improved market access, more stable and reliable supply chains, enhanced competitiveness, and increased export volumes. It added, “The FTA is expected to boost India's exports by significantly reducing tariffs, easing trade barriers leading to improved market access and make Indian products more price competitive, thereby increasing their demand in the UK.”
Furthermore, the agreement comes as a relief for Indian exporters facing subdued sales and ongoing concerns over possible reciprocal tariffs from the United States.
According to the agreement, 99 per cent of Indian tariff lines—representing nearly the entire trade value—will receive duty-free access to the UK market. At present, most Indian goods exported to the UK are subject to import duties ranging between 4 per cent and 18 per cent.
The FTA is expected to unlock new export potential in key Indian sectors including textiles, marine products, leather, footwear, sports goods and toys, gems and jewellery, engineering goods, auto parts, and organic chemicals.
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