Editor’s Note
The India-UK Free Trade Agreement takes effect today, marking a pivotal step toward a $100 billion bilateral trade target by 2030. By granting zero-duty access for 99% of Indian goods to the UK’s premium market, the pact promises to boost exports, spur innovation, and ease professional mobility.
The India-UK Free Trade Agreement (FTA) came into effect on Wednesday. It is considered highly significant from an economic perspective. The agreement aims to increase bilateral trade between the two countries to $100 billion by 2030.
This agreement will serve as a regulatory framework to improve market access between the two countries, accelerate industrial innovation, and enhance the movement of professionals.
With this FTA, Indian exporters have gained access to the large UK market, which is considered one of the world’s most premium consumer markets. Under this agreement, 99% of Indian goods will enter the UK with zero duty, effectively making approximately 100% of the total value of India’s trade with the UK duty-free.
You can gauge the benefits of the agreement from this: Before the FTA, processed food exported from India to the UK faced duties of up to 70%, which have now been reduced to zero. Duties on vegetables have been reduced from up to 20% to zero. Duties on transport/auto have been reduced from up to 18% to zero, and duties on textiles have been reduced from up to 12% to zero.
Furthermore, duties on chemicals, jewelry, plastics and rubber, and watches have also been reduced to zero.
Beyond goods, this FTA will significantly benefit professionals.
Under this FTA, the UK has extended the exemption from the Double Contribution Convention (DCC) for Indian employees from three years to five years. This will eliminate the requirement for double social security contributions for those temporarily working in the UK. This is expected to benefit over 75,000 professionals and nearly 900 companies working in India’s IT, engineering, consulting, and healthcare sectors.
In this agreement, India has excluded its sensitive sectors such as dairy, fruits, vegetables, and food grains.
Under this trade agreement, tariffs on several British products such as Scotch whisky, gin, chocolate, biscuits, and cosmetics will now begin to decrease. However, duty reductions on many products will be implemented gradually over the coming years.
This important trade agreement was signed on July 24, 2025, after 14 rounds of negotiations. It contains 30 chapters covering topics such as trade in goods and services, digital trade, financial services, intellectual property, innovation, sustainability, and government procurement.
