India-UK FTA creates win-win framework: 99% tariff elimination boosts trade while mobility pact eases services exports

The India-UK free trade agreement (FTA) will see exports of 99% of the goods (tariff lines) covering almost 100% of the trade value from India to the UK becoming more competitive due to tariff elimination offering huge opportunities for increase in the bilateral trade between India and the UK, Union Ministry of Commerce and Industry has said.

The FTA provides positive impact on manufacturing across labour and technology intensive sectors and opens up export opportunities for sectors such as textiles, marine products, leather, footwear, sports goods and toys, gems and jewellery and other important sectors such as engineering goods, auto parts and engines and organic chemicals, the ministry said in a statement.

“This Agreement sets a new benchmark for equitable and ambitious trade between two large economies. It will benefit Indian farmers, fishermen, workers, MSMEs, startups and innovators. It brings us closer to our goal of becoming a global economic powerhouse. This FTA is not only about goods and services, but also about people, possibilities and prosperity. It protects our core interests while opening doors to India’s greater participation in global value chains,” Piyush Goyal, Union Minister for Commerce and Industry, said.

According to the ministry, India will benefit from the FTA commitment from the UK in services such as IT/ITeS, financial services, professional services, other business services and educational services, opening up new opportunities and jobs.

The FTA eases mobility for professionals, including Contractual Service Suppliers, Business Visitors, Investors, Intra-Corporate Transferees, partners and dependent children of Intra-Corporate Transferees with right to work; and Independent Professionals like yoga instructors, musicians and chefs.

Both countries have also agreed to provide digitally delivered services for service suppliers.

The exemption for Indian workers who are temporarily in the UK and their employers from paying social security contributions in the UK for a period of three years under the Double Contribution Convention will lead to significant financial gains for the Indian service providers and enhance their competitiveness in the UK market that would create new job opportunities as well as benefit large number of Indians working in the UK, the ministry statement said.

The current India-UK FTA engagement builds upon the discussions held between the two Prime Ministers on the sidelines of the G-20 Summit in Rio de Janeiro, Brazil, in November 2024. Following the meeting between the two Prime Ministers, intense FTA negotiations resumed in February 2025, marked by several engagements between the Commerce and Industry Minister Piyush Goyal and the U.K. Secretary of State Jonathan Reynolds and their teams.

The FTA takes place in the backdrop of growing economic relations between India and the UK as exemplified in the bilateral trade of about $ 60 billion which is projected to double by 2030.