During my tenure at UK Trade & Investment (UKTI), we had a clear mandate—to double UK-India bilateral trade from £12 billion to £24 billion in five years. Back then (2012), this felt like a stretch target. Today, we’re aiming for $130 billion by 2030. It’s a reflection of how close, complex, and commercially relevant the UK-India relationship has become.
And now, as of May 6, 2025, the UK and India have officially signed a Free Trade Agreement (FTA)—a deal touted as the UK’s most ambitious bilateral trade pact since Brexit[1].
Let’s unpack what it actually means for businesses on both sides.
What’s in the UK-India FTA?
After over three years and 13 rounds of negotiation, the agreement is now signed and moving toward ratification.
Key highlights[2]:
- Tariffs Eliminated or Reduced: On 92% of UK exports to India—like Scotch whisky, automobiles, machinery, and EVs.
- Services Market Opened Up: IT, legal, architecture, and professional services can now operate with fewer restrictions.
- Talent Mobility Improved: Simplified visa pathways for skilled professionals, intra-corporate transferees, and independent workers.
- Public Procurement Access: UK firms can now compete in Indian government tenders—a huge plus for mid-sized and GovTech businesses.
Why This Agreement Matters (Beyond Headlines)
The FTA is expected to:
- Boost bilateral trade by £25.5 billion annually
- Add £4.8 billion per year to the UK economy
- Increase annual wages by £2.2 billion
But here’s the real kicker—it’s no longer just about goods. Services, IP, education, digital infrastructure, and talent flow are now front and centre.
A Fast-Track for Indian SaaS Companies
Let’s say you’re an Indian SaaS startup from Pune or Bangalore. This deal offers:
- Liberalised services access: You can now serve UK clients remotely without setting up a full local entity[3].
- Simplified talent deployment: Your tech leads or sales team can move under streamlined visa categories like Independent Professionals or Intra-Corporate Transferees.
- Public sector access: With the UK market’s digital push, GovTech and SaaS firms can now bid for UK government contracts more easily.
- IP and data clarity: Stronger frameworks for IP protection and a roadmap for cross-border data governance—critical for B2B software firms.
Sectoral Snapshot: Who Stands to Gain
| Sector | Opportunities | Watchpoints / Challenges |
|---|---|---|
| Textiles & Apparel | Lower duties on exports to UK; Surat and Tiruppur to benefit | Compliance with UK labelling standards & ESG requirements |
| Pharma & Chemicals | Improved tariff access for generics, APIs, and specialty chemicals | Regulatory harmonisation, IP protection concerns |
| EV & Clean Tech | Tariff reduction on EVs and components; cleaner tech collaboration | Tech transfer barriers, IP sensitivity, sustainability criteria |
| Education & Mobility | Streamlined visa pathways for students and professionals | Processing bottlenecks, mutual recognition of qualifications |
| FinTech & SaaS | Remote service delivery, talent mobility, IP support, public procurement access | CBAM-like policy risks, data localisation and digital standards |
But Not All Is Smooth Sailing
- The Carbon Border Adjustment Mechanism (CBAM)—a policy that taxes carbon-heavy imports—is excluded from the agreement. That’s a concern for Indian steel and cement exporters[4].
- UK’s life sciences industry feels IP protections didn’t go far enough, especially for patented drug portfolios[5].
Strategic Moves Businesses Should Consider
If you’re eyeing cross-border growth:
- Map tariff and non-tariff advantages in your category.
- Review your talent mobility strategy—could you place a team in the UK now?
- Re-evaluate supply chain positioning—India could now be a stronger base for UK-EU-Asia corridors.
- Get advisory support early—Regulatory compliance, certifications, and tax planning are key.
My Take
Having seen UK-India trade dynamics from the inside, I’ll say this—agreement works the best when people trust the system. The FTA sets up a clear framework, but it’s up to businesses, consultants, investors, and institutions to activate it.
Whether you’re a founder, a trade official, or a market-entry strategist, the time to act is not when everything is ratified—it’s now. Because the early movers often shape the story.
