The UK-India Free Trade Agreement has officially been signed, but what impact will this have on importers, exporters, and what industries will benefit from it the most? 

In this blog, we will examine what the UK-India FTA is and the key components of the agreement. We will also look at what benefits the agreement is set to have on importers and exporters, the industries that will be most affected, and top tips on how businesses can prepare. 

 

What is the UK-India Free Trade Agreement?

The UK-India Free Trade Agreement (FTA) was officially signed on 24 July 2025, after 15 rounds of negotiations that began on 13 January 2022. The agreement aims to strengthen the relationship between the two countries, as well as reduce tariffs, improve trade flows, streamline logistics processes, and strengthen supply chains. 

Although the FTA has been signed, it is not yet enforced. First, each country must complete ratification and legal procedures. Once ratification has been completed, the FTA will start to be phased in. Whilst there is no set date for this yet, it is expected to be mid-to-late 2026.

Once it has been ratified, the UK-India Free Trade Agreement will be the UK’s fourth-largest trade agreement behind the EU, Australia, and Japan FTAs.

 

Key Trade Provisions of the FTA

The UK-India FTA is a comprehensive agreement that brings a number of changes to trade between the two countries and the logistics processes businesses will need to follow. We have summarised some of the key trade provisions of the FTA below: 

 

Tariff reductions on exports

The UK-India FTA includes implementing tariff reductions and eliminations on exports to the UK and India:

  • Exports to the UK: Tariffs will be eliminated on 99% of exports to the UK, and there will be reductions on clothing, footwear, and food products. 

  • Exports to India: Tariffs will be reduced on 90% of exports to India, including whisky and gin, vehicle parts, cosmetics, aerospace, and medical devices. 

 

Streamlined customs processes

The FTA also aims to improve current customs procedures to make cross-border trade between the UK and India quicker and more efficient. They plan to do this in several ways: 

  • Implementing simplified customs procedures to reduce paperwork and improve processing times

  • Clearing goods at ports more quickly to reduce delays in the supply chain 

  • Implementing new customs frameworks to improve the efficiency of trade flows between the two countries and increase the predictability of the supply chain

 

Implementation of digital trade

Provisions will be put in place to improve digital trade, reducing the need for paperwork, speeding up processes, and making consumers feel more secure online. Digital services being put in place include: 

  • Recognising electronically signed contracts

  • Improving cross-border data flows 

  • Localisation of data

  • Reducing spam messages 

 

Improved access to goods and services

The UK-India trade agreement will also provide both countries with better access to different markets, goods, and services. 

By implementing the ‘Rules of Origin’, the FTA hopes to improve the UK’s access to the Indian market. This is particularly important for goods that have materials or ingredients partly sourced from countries outside of the agreement.  

It is also expected that UK businesses will get access to India’s procurement market. This includes access to goods, services, and construction and is particularly beneficial to businesses in the clean energy, transport, healthcare, and life sciences sectors.

The FTA will also:

  • Provide UK services companies with ‘market certainty’ when operating in India

  • Ensure UK financial services companies are treated equally to Indian companies when operating in India, rather than being disadvantaged 

  • Encourage regulators and other professional bodies across both countries to agree on mutual recognition of qualifications

 

Copyright protection put in place

The FTA ensures that copyright protections will remain in place, with India committing to protecting any creative works exported there for a minimum of 60 years. 

 

Agreements on core values

The FTA ensures that the UK and India are in alignment when it comes to a range of core values, including: 

  • Anti-corruption rules

  • Consumer protection

  • Labour rights

  • Gender rights

  • Animal welfare

  • Food standards

 

Better business mobility

The UK-India FTA aims to help improve business mobility and make it easier for professionals to work across borders. It aims to make visa processes clearer and more transparent, and help professionals attend overseas conferences, move location within their company, and provide short-term contracted services more easily and efficiently.

 

What are the Benefits of the FTA for Importers and Exporters?

Importers and exporters can experience a range of benefits as a result of the Free Trade Agreement: 

 

Faster clearance times

By improving customs clearance procedures, the FTA is expected to reduce bottlenecks and delays at ports. This will ultimately make the flow of goods more efficient and streamlined, reducing lead times and benefiting both importers and exporters.  

 

Reduced paperwork

The streamlining of customs processes and implementation of digital logistics solutions, such as the acceptance of digitally signed contracts, will reduce the amount of paperwork and speed up processing times for importers and exporters. 

 

Increased trade volume

As tariffs are being reduced or eliminated, it is expected that trade volume will significantly increase. This will allow companies to trade higher volumes of goods in a quicker, more cost-efficient way, ultimately increasing profitability. 

 

Reliable and diverse supply chains

Having increased access to goods and services, as well as fewer delays at customs clearance, means businesses will have a more reliable and diverse supply chain.

 

 

Which Sectors Will Be the Most Affected?

 

Automotive industry 

The automotive industry will benefit from the UK-India Trade Agreement, as tariffs on vehicles and vehicle parts imported into India will be significantly reduced. Tariffs on automotive products will reduce from 100%+ to just 10%.

 

Food and beverage industry

The food and beverage industry will experience reduced tariffs on some consumable products:

  • UK whisky and gin will see a reduction in tariffs from 150% to 75%, then to 40% after ten years

  • Lamb, salmon, soft drinks, chocolate, and biscuits being exported to India will also benefit from tariff reductions

  • Food products, such as frozen prawns, being exported to the UK will also benefit from significantly reduced tariffs

 

Pharmaceutical and healthcare industry

The UK-India FTA will provide both countries with better access to products and services that will benefit the healthcare and pharmaceutical industries. There will also be reduced tariffs on UK exports of advanced manufacturing, such as medical devices. 

 

Textiles and apparel industry

Reduced tariffs will also benefit the textiles and apparel industry, with importers and exporters able to transport cosmetics, clothing, and footwear in a more efficient and cost-effective way. 

 

Ecommerce and retail industry

The Free Trade Agreement between the UK and India will ultimately reduce barriers to trade, streamline customs clearance procedures, and make it a quicker and easier process. This will enable the ecommerce and retail industries to expand more quickly across borders.

 

Technology and electronics industry

The tech and electronics industry is expected to experience higher volumes of trade in electronics and tech services. This will encourage innovation in both countries and help the industry achieve further growth. 

 

Top Tips for Capitalising on UK-India FTA Logistics Opportunities

 

Understand the details of the agreement

Taking time to understand the intricate details of the FTA can ensure you and your business are benefiting as much as possible. The UK Government has put together a collection of documents and resources explaining the different elements of the trade deal in detail.

 

Stay up-to-date on regulatory changes

Although the FTA has been signed, it still has to go through the ratification process. This means details may still change and be updated before it comes into effect. It is important to stay up to date on regulatory changes by monitoring compliance requirements, digital logistics processes, and tariff updates. 

This will also help you stay updated on key dates, such as when the proposed changes are due to be phased in.

 

Start training staff on customs compliance

Once the FTA is in effect, it is important to follow the rules and regulations set out to remain compliant. Starting to train your staff on elements of the Trade Agreement, such as the Rules of Origin and new customs clearance procedures, will make sure they are prepared once the changes are phased in and help you reap benefits from the start.

 

Invest in digital logistics platforms

With the FTA supporting more digital trade, now would be a good time to invest in digital logistics platforms. Using digital platforms can help you provide instant quotes, automate customs documentation, and offer real-time tracking to your customers. This will help you and your customers benefit from streamlined processes and end-to-end visibility. 

 

Plan ahead for higher trade volumes

The UK-India Free Trade Agreement will likely result in higher trade volumes, so it is important to prepare in advance, particularly if you are in an industry that will significantly benefit from reduced or eliminated tariffs. 

Make sure you have enough resources to meet higher demand, such as specialised freight containers and temperature-controlled reefers. You could also create product forecasts for different product types and seasons, to help you prepare. 

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