The bilateral trade between India and the United Kingdom (UK) is expected to increase by around 15% annually until 2030, factoring in the aspect that the free trade agreement (FTA) will come into effect in a year, a report showed on Friday.&nbsp;
The recently concluded free trade agreement (FTA) between India and Britain offers a strategic opportunity for Indian companies to expand their footprint in the UK market, stimulate domestic manufacturing and contribute to economic growth, according to the report by CareEdge Ratings.
&ldquo;This landmark FTA also fosters investment, joint ventures, and collaboration in the service sector, thereby deepening economic ties. Going forward, this agreement marks a pivotal shift in India-UK economic relations, unlocking new opportunities for businesses, strengthening manufacturing, and enriching consumer markets,&rdquo; said D Naveen Kumar, Associate Director, CareEdge Ratings.
Currently, the trade value between the United Kingdom (UK) and India is approximately 2% of India&rsquo;s total trade value, although it has been growing steadily at a compound annual growth rate (CAGR) of 11% over the last decade.
The UK and India entered into a free trade agreement (FTA) on May 6, following approximately three years of negotiations.
Under the agreement, India will reduce tariffs on 90% of British goods, with 85% becoming completely duty-free over a period of 10 years. In return, Britain has agreed to lower its tariffs on certain products, resulting in 99% of India&rsquo;s exports to the UK facing zero duties.
&ldquo;Some of the benefits of FTA for Indian exporters would include improved market access, stable supply chains, increased competitiveness, higher volumes and new avenues for growth,&rdquo; the report mentioned.
The FTA is expected to boost India&rsquo;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.
Additionally, this has provided some relief to exporters who have been facing sluggish sales and uncertainty about potential reciprocal tariffs from the US.
In key sectors such as automobiles, whisky, industrial machinery, and pharmaceuticals, significant gains are set to be made through steep tariff reductions and simplified regulations.&nbsp;
According to the report, the India&ndash;UK FTA is poised to create substantial opportunities for Indian gems and jewellery makers by tapping into the UK&rsquo;s affluent consumer base and well-developed luxury market.
The tariffs range from 8% to 14% for various electrical and engineering goods. With their removal under the India&ndash;UK FTA, Indian manufacturers are poised to gain a clear competitive edge over other global suppliers, said the report.
&mdash;IANS
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FTA boosts investment, services, and marks a shift in India-UK trade ties (File Photo)

India-UK trade is 2% of India’s total, growing at an 11% CAGR over the past decade

India-UK FTA to Boost Trade by 15% Annually

India-UK trade is 2% of India’s total, growing at an 11% CAGR over the past decade

May 16, 2025 | 13:29 IST