UK-India FTA Takes Effect to Boost Trade

By Milan Rojan

The UK-India Free Trade Agreement (FTA) has entered into force today, marking a significant milestone in bilateral economic relations and opening the way for businesses in both countries to access lower tariffs and expanded market opportunities.

The agreement, described by the UK government as India’s most comprehensive trade deal to date, has been designed to strengthen trade, investment and economic cooperation between the two countries. Over the long term, the deal is expected to increase bilateral trade by $34.4 billion annually, contribute $6.5 billion to UK GDP and raise real wages by $3 billion.

With the agreement now in effect, UK exporters can benefit from substantial tariff reductions across several sectors. Tariffs on whisky have reduced from 150% to 40%, while automotive tariffs have fallen from 100% to 10% under a quota system. Tariffs on cosmetics and a range of other products have also been eliminated immediately or will be phased out over time.

The UK has also lowered tariffs on selected Indian exports, including clothing, footwear and certain food products, with the aim of reducing import costs and increasing product choice for consumers.

Alongside the FTA, the UK-India Double Contributions Convention has also entered into force. The arrangement extends social security contribution relief for eligible professionals working temporarily in either country from 36 months to 60 months, allowing them to continue contributing to their home country’s social security system.

Businesses seeking to benefit from the preferential tariff arrangements were required to register with the relevant customs authorities and comply with the agreement’s rules of origin requirements.

The implementation of the agreement has marked the beginning of a new phase in UK-India trade relations, supporting greater commercial collaboration and cross-border business opportunities across multiple sectors.