UK-India Free Trade Agreement Expected to Boost Bilateral Trade, Investment and Technology Collaboration
FTA aims to expand market access, reduce tariffs, strengthen supply chains, and enhance cooperation across sectors including textiles, healthcare, AI and advanced manufacturing.
The UK-India Free Trade Agreement (FTA) is forecast to increase bilateral trade by £25.5 billion annually over the long term. According to the published report, the agreement is expected to increase India’s GDP by £5.1 billion and the UK’s GDP by £4.8 billion, while strengthening supply chains, supporting employment and creating new business opportunities in both countries.
The agreement also extends benefits under the Double Contributions Convention (DCC) for UK nationals relocating to India for work. Under this arrangement, eligible workers can continue building entitlement to a UK State Pension from 36 months to 60 months. During this period, they will continue paying National Insurance Contributions in the UK without paying social security contributions in India. The provision is reciprocal for British and Indian professionals and applies to highly skilled workers on pre-existing visa routes.
With the FTA now in force from 15 July 2026, businesses in both countries are expected to benefit from improved market access, lower tariffs, streamlined customs procedures and greater support for digital trade, particularly benefiting SMEs.
Tariff Reductions and Market Access
For UK exporters, India will remove or reduce tariffs on 90% of its tariff lines for UK products. At the time the agreement comes into force, 64% of UK products will become duty-free, representing approximately £1.9 billion of current UK exports. Over time, 85% of products will receive duty-free access.
For Indian exporters, 99% of Indian exports to the UK will receive duty-free access from the agreement’s implementation.
Overall, 99% of UK tariffs and 90% of Indian tariffs will be liberalised, supporting increased trade across multiple sectors. The agreement is also expected to expand consumer access to a wider range of products in both markets.
Government Procurement and Business Opportunities
The FTA introduces India’s first comprehensive government procurement chapter within a trade agreement. UK suppliers will gain access to bid for India's central government procurement contracts for goods and services, a market valued at approximately £38 billion annually.
Companies sourcing more than 20% of their goods or services from the UK can qualify as "Class II suppliers", enabling participation in Indian government tenders. In return, India receives legally guaranteed access to the UK’s procurement system.
The agreement is also expected to support Indian companies expanding operations in the UK through improved access to expertise, investment and financial services.
Digital Trade and SME Support
A dedicated digital trade chapter seeks to promote paperless trade between the two countries. The agreement supports electronic contracts and digital transactions while encouraging cooperation on technology-driven trade practices.
Both governments have agreed to release goods as rapidly as possible, with an objective of completing customs clearance within 48 hours, while prioritising perishable goods. The agreement also includes provisions aimed at making customs procedures accessible online and facilitating the exchange of best practices to support SMEs entering new markets.
Technology, Innovation and Sector Collaboration
The FTA expands cooperation in science, innovation and technology through commercialisation initiatives covering sectors including agriculture, healthcare, advanced manufacturing, clean energy, Artificial Intelligence (AI), telecommunications and biotechnology.
The agreement also supports collaboration on 6G networks, AI, biotechnology and pharmaceutical innovation, alongside joint research and development opportunities.
Healthcare and Pharmaceuticals
According to the agreement, all Indian tariffs (currently ~11%) on UK pharmaceutical products will be removed, with 87.6% becoming duty-free immediately upon entry into force and the remaining tariffs eliminated within 5 or 10 years.
For medical devices, the UK secures full market access. Indian tariffs ranging from 8.25–13.75% will be phased out over 10 years, with staged reductions for certain sensitive products. Lower import duties on high-value medical technologies are expected to support joint research and development.
The agreement also includes commitments on intellectual property cooperation, transparent administration and enforcement of IP rights to support innovation across medtech and biopharmaceutical sectors.