India has successfully negotiated safeguards for its sensitive sectors within the newly formalized Free Trade Agreement (FTA) with the United Kingdom. The agreement, finalized after 14 rounds of negotiations, reflects a balanced approach, ensuring that while a significant portion of trade is liberalized, key domestic industries remain protected.
Under the terms of the FTA, a quarter of UK exports will receive immediate duty-free access to the Indian market. However, concessions for other products will be introduced gradually over several years. To prevent circumvention, the agreement includes specific rules of origin to ensure that goods genuinely originate from the UK.
India has secured exemptions from tariff cuts for several sensitive agricultural products, including dairy, apples, and poultry. This decision reflects the importance of protecting the livelihoods of rural communities and supporting domestic agricultural industries. In addition to agriculture, India has also shielded strategic industrial sectors such as diamonds and cell phones from tariff reductions.
The FTA is expected to significantly boost bilateral trade, with goals to double trade from $60 billion in 2024 to $120 billion by 2030. By 2040, the agreement is projected to provide an annual trade boost of $25.5 billion. The UK will eliminate tariffs on 99% of Indian tariff lines, covering almost all of India's trade value. India, in turn, will reduce tariffs on 90% of UK tariff lines, with 85% becoming fully tariff-free within a decade. This will lead to lower prices for consumers in both countries. UK shoppers can anticipate more affordable Indian apparel, footwear, and marine products, while Indian consumers will have access to cheaper UK goods like whisky, cosmetics, medical devices, and salmon.
The agreement also focuses on attracting UK investment to India's infrastructure, manufacturing, and renewable energy sectors, supporting India's goal of becoming a $5 trillion economy by 2028. Strategically, the FTA diversifies India's trade portfolio, enhancing economic resilience by reducing reliance on any single market.
The FTA will help the Indian agriculture sector transition from focusing on high volume to high-value products, and from catering to local markets to expanding globally. India has ensured that the FTA fully protects sensitive sectors like dairy, vegetables, apples, cooking oils, and oats, with no tariff concessions on these commodities. The UK market, valued at $5.4 billion, has also opened up for Indian marine exports, with UK import duties on marine products set to fall to zero from up to 20 percent.
The FTA offers new opportunities for Indian professionals, exempting 75,000 Indian workers from UK social security payments for three years and granting access to 36 service sectors without an Economic Needs Test for Indian firms and freelancers. Indian professionals can work in as many as 35 UK sectors for up to 2 years without needing a local office. Approximately 60,000 Indian intra-corporate transferees are currently working in the UK in the IT sector. The UK has committed to providing visas for three years, not only for workers but also for their partners and dependents and has agreed not to impose numerical quotas or Economic Needs Test requirements for these categories.
India and the UK have also agreed to negotiate mutual recognition agreements (MRAs) within 36 months to facilitate the movement of professionals like nurses, accountants, and architects to Britain. The UK will allow business visitors and intra-corporate transferees, including partners and dependents, with an assured mobility regime. Business visitors across all sectors will be allowed entry for up to 90 days within any six months, and intra-corporate transferees, including partners and dependents, can stay for up to three years.
