India–UK Trade Deal to Spur 15 % Annual Growth Through 2030, Says CareEdge

The bilateral trade between India and the United Kingdom is expected to grow by about 15 per cent a year until 2030, on the assumption that the recently concluded free-trade agreement (FTA) will take effect within the next twelve months, according to a report released on Friday.

The accord, finalised on 6 May after nearly three years of negotiations, presents a strategic opportunity for Indian companies to deepen their presence in the British market, stimulate domestic manufacturing and drive overall economic expansion, CareEdge Ratings said.

“This landmark FTA also fosters investment, joint ventures and collaboration in the services sector, thereby deepening economic ties. Going forward, the agreement marks a pivotal shift in India–UK economic relations, unlocking new opportunities for businesses, strengthening manufacturing and enriching consumer markets,” observed D. Naveen Kumar, Associate Director at CareEdge Ratings.

At present the United Kingdom accounts for roughly two per cent of India’s total trade, yet the relationship has been expanding at a compound annual growth rate of 11 per cent over the past decade.
Under the deal, India will cut tariffs on 90 per cent of British goods, with 85 per cent becoming entirely duty-free over ten years. In return, the UK will abolish duties on selected products, leaving 99 per cent of Indian exports tariff-free.

“Key benefits for Indian exporters include improved market access, more resilient supply chains, greater competitiveness, higher volumes and fresh avenues for growth,” the report noted.

Lower tariffs and streamlined regulations are expected to bolster India’s export performance, making its products more price-competitive and therefore more attractive to British buyers. Exporters, who have faced sluggish sales and uncertainty over possible retaliatory US tariffs, may find welcome relief.

Significant gains are anticipated in automobiles, whisky, industrial machinery and pharmaceuticals, where steep tariff cuts and simplified norms will apply. The agreement is also set to open lucrative prospects for India’s gems-and-jewellery sector by leveraging the UK’s affluent consumer base and mature luxury market.

Tariffs ranging from 8 per cent to 14 per cent on various electrical and engineering goods will be scrapped, giving Indian manufacturers a clear edge over global rivals, the report added.