India-UK Free Trade Agreement: Sectors Likely To Benefit

The India-UK Free Trade Agreement (FTA), signed on July 24, 2025, is expected to open up fresh export opportunities for several Indian industries. By removing or lowering import duties on a wide range of Indian exports, the FTA gives Indian exporters a better ground at competing with other low-cost producers in the UK market.

The deal, finalised after a high-level meeting with UK Prime Minister Keir Starmer at the Chequers Estate, aims to double bilateral trade from current $60 billion to $120 billion by 2030.

Amit Baid, Head of Tax at BTG Advaya, said the agreement opens a "two-way corridor of opportunity" as global supply chains shift. "The real success, however, will depend on how effectively both sides convert this market access into meaningful outcomes for jobs, supply chains, and investors," he added.

Romil Jain, a chartered financial analyst (CFA), deputy CIO and fund manager at Electrum Portfolio Managers, shared which sectors are likely to benefit from the India-UK FTA.

Textiles and Apparel: The textile industry, especially the ready-made garments segment, is expected to be one of the biggest beneficiaries of the India-UK FTA. Indian textile exporters, as Jain highlighted, currently hold a 6.6 per cent share of the UK's $27 billion textile import market, behind China with 25 per cent, Bangladesh with 15 per cent and Turkey with 8.5 per cent. "With FTA in place, RMG players will now have a duty-free access to the UK market and thereby compete with other nations like Bangladesh, China, Turkey. etc.," said Jain.

Agriculture and Seafood: The FTA opens up the UK's $37.5 billion agricultural market to Indian farmers and a $5.4 billion market to India seafood exporters. The agreement also protects India's sensitive sectors like dairy, apples, and edible oils, with no tariff cuts in these areas.

According to Jain, "Agricultural sector with segments like seafood, edible oil and oil seeds, spices, fruits, tea, coffee are also expected to get duty free access to UK market which is a huge positive for the sector."

Pharmaceuticals and Medical Devices: The removal of duties on generic drugs and medical equipment is likely to support Indian pharma exporters. Given the UK's demand for affordable healthcare products, Indian companies could see a rise in order volumes.

Engineering and Electronics: Indian engineering goods and electronics manufacturers may benefit from improved price competitiveness in the UK, thanks to lower tariffs and simpler trade rules.

Chemicals, Gems and Jewellery, Rubber: Other sectors that stand to gain include rubber products, chemicals, and gems and jewellery, where duty cuts will allow Indian exporters to enhance their UK presence.

Jain also said, "Few other sectors that stand to benefit include gems and jewellery, rubber and chemicals, generic drugs, medical devices, marine products, electronics and engineering sector, leather and footwear."

"Many of the Indian companies currently have small share of export revenues coming from the UK. With the FTA now in, place we expect steady growth in UK export market share for Indian companies," added Jain.