India-UK Trade Deal: From Textiles, Jewellery To IT, Who Gets What In Historic Pact | Business News

The India-UK Free Trade Agreement represents a significant milestone in the economic ties between the two nations, following years of complex negotiations. Talks originally kicked off in January 2022 during Boris Johnson’s tenure as UK prime minister, with an initial goal of wrapping up by Diwali that year. Despite several setbacks and delays, the agreement was ultimately finalised in May 2025. PM Modi hailed the deal as a “historic” achievement.

How India Stands To Benefit

The FTA with UK is expected to boost the export of labour-intensive items such as gems, jewellery, textiles, marine products, leather, footwear, sports goods and toys. According to a statement by the commerce ministry, other key exports like engineering goods, auto parts and engines and organic chemicals are also expected to get a boost.

“India has ensured that non-tariff barriers are suitably addressed to ensure free flow of goods and services and that they do not create unjustified restrictions to India’s exports,” the statement added.

The Gem & Jewellery Export Promotion Council (GJEPC) said the deal could open up better market access, boost exports, and enhance trade relations with the UK. The UK presents a substantial market for jewellery, with annual imports valued at around $3 billion. Currently, India’s share in this market is approximately $400 million, representing about 15 per cent.

Also, eased mobility rules for Indian professionals and streamlined entry for IT companies are set to drive growth in the sector. According to the commerce ministry, the move could benefit more than 60,000 IT professionals each year. Major beneficiaries include TCS, Infosys, Tech Mahindra, HCL Technologies, and Wipro.

Apart from this, tariff concessions for Indian tea, spices, and ready-to-eat products will improve market access.

A major benefit of the deal is the introduction of a social security agreement, which exempts Indian employees in the UK from paying into the British social security system for up to three years. This measure is projected to save Indian workers and businesses approximately Rs 4,000 crore annually.

The deal also creates new opportunities for Indian professionals, including chefs, yoga teachers, musicians, and other contract-based workers, by granting them temporary entry into the UK job market. This is expected to provide a boost to India’s services industry.

What Works For UK

According to the British government, the trade agreement will lead to substantial cuts in Indian tariffs, with reductions secured on 90 per cent of tariff lines. Over the next 10 years, 85 per cent of these will be entirely exempt from tariffs.

Under the agreement, tariffs on whisky and gin will initially drop from 150 per cent to 75 per cent, with a further reduction to 40 per cent by the tenth year. Meanwhile, import duties on automobiles will be brought down to 10 per cent, but within a specified quota.

In a statement, UK said: “Other goods with reduced tariffs, which can open markets and make trade cheaper for businesses and Indian consumers, include cosmetics, aerospace, lamb, medical devices, salmon, electrical machinery, soft drinks, chocolate and biscuits.”

The agreement grants UK businesses expanded access to public procurement opportunities in India. Under the FTA, British companies will be eligible to bid on non-sensitive government tenders valued above Rs 2 billion. This unlocks potential participation in nearly 40,000 tenders each year, collectively worth around Rs 4.09 lakh crore.