India-UK trade deal: India’s engineering exports to UK may double to $7.5 bn by FY30

India’s engineering exports to the UK are projected to nearly double over the next five years, potentially reaching $7.5 billion by FY30, following the signing of the India-UK Comprehensive Economic and Trade Agreement (CETA), according to sources in the government. 

The UK is currently India’s sixth-largest engineering export market. In FY25, India recorded 11.7% growth in engineering exports to the UK. Despite this, Indian shipments to the UK remain relatively low at $4.28 billion, compared to the UK’s total engineering imports worth $193.52 billion. This points to considerable room for expansion.

“Conversely, India will benefit from duty-free access for 99% of its exports to the United Kingdom, thus bolstering essential sectors such as textiles, leather, gems and jewellery, and agriculture. Indian farmers are expected to gain enhanced market access for spices, fruits, and processed foods. Additionally, the agreement facilitates cooperation in emerging fields, including fintech, green energy, and the mobility of professional services,” said Prashant Tandon, Executive Director – Listed Investments, Waterfield Advisors, in a statement.

India’s global engineering exports stand at $77.79 billion. The CETA is expected to support the country’s broader target of achieving $250 billion in engineering exports by 2030, with the UK emerging as a critical trading partner.

A key driver of this projected growth is tariff elimination. Under the agreement, duties as high as 18% will be removed on a wide range of engineering goods. The UK will eliminate all tariffs on industrial machinery and electrical machinery, opening the door for greater Indian participation in advanced manufacturing supply chains.

Engineering products such as electric machinery, auto parts, industrial equipment, and construction machinery are expected to grow at a compound annual growth rate of 12–20% as a result of the agreement. In the automotive segment, conventional vehicles and components will gain duty-free access, while electric, hybrid, and plug-in vehicles will benefit from concessional access under tariff rate quotas.

Exports of medical devices and instruments, such as surgical and diagnostic equipment, will also enjoy zero-duty access. The agreement fully liberalises aerospace and defence exports, covering aircraft parts and defence-related equipment.

Base and non-ferrous metals, including copper, aluminium, nickel, zinc, lead, and tin, will also see complete tariff elimination. Similarly, renewable energy machinery and electrical components will face no tariffs, boosting India’s exports in the clean energy segment.

The UK’s tariff schedule under the pact indicates a strong focus on industrial cooperation, providing broad tariff relief across India’s key engineering export categories.