India-UK FTA to boost pharma exports, textiles and SME opportunities, says PHDCCI

India-UK Free Trade Agreement (FTA) could see domestic pharmaceutical companies supply more generic medicines to UK’s National Health Service (NHS) due to easier regulatory approvals and mutual recognition of standards that are part of the agreement, an analysis of the FTA deal by industry chamber PHDCCI says.

A detailed sector wise analysis carried out by the chamber says elimination of duties on 99% of garments and home textiles will boost exports and employment in labour-intensive sectors, especially in Gujarat, Tamil Nadu, and West Bengal. While States like Kerala, Punjab, and Andhra Pradesh are to benefit from duty free access of processed foods, seafood (e.g., frozen prawns), rice, tea, and spices to the UK market, liberalized visa norms and recognition of professional qualifications should benefit exports of services and employment from IT hubs like Bengaluru, Hyderabad, Pune, the chamber said.

Lower tariffs for gold and diamond studded jewellery will boost exports from key clusters like Surat and Jaipur and improved opportunities for Indian institutions to collaborate with UK universities will see more Indian students, exchange programmes, and bilateral R&D initiatives in the education and skill development sector, PHDCCI says.

On non-tariff-barrier front, the FTA will see a push for more local sourcing or joint ventures in EV battery/parts due to origin traceability clauses, it says. In processed food products, India will have to strictly adhere to the rules of origin as processing of imported inputs may become difficult under the new FTA, it said.

The deal is small and medium enterprise (SME) friendly, the chamber says. PHDCCI points out that SMEs can leverage the FTA to access new markets and clients in the UK particularly in sectors like legal, accounting, auditing and engineering. It also points out that the provision to exempt temporary Indian workers from the dual social security contributions for three years will reduce operational costs for SMEs sending employees abroad. Similarly, FTA provides SMEs with access to new technologies and innovations, fostering growth in digitally-driven industries and enhancing their global competitiveness, it adds.

The India–UK FTA is set to significantly boost bilateral trade to over $ 60 billion by 2030 through the elimination of tariffs on 99% of Indian exports, including textiles, leather, and auto parts. It also addresses non-tariff barriers, streamlining trade processes, Hemant Jain, President, PHDCCI, said.