India-UK FTA: Indian electronics, textiles, pharma, chemicals to get zero duty access

The India and United Kingdom on July 24 signed a Comprehensive Economic Trade Partnership, which is set to give zero duty access to a range of Indian exports such as electronics, textiles, chemicals, pharmaceuticals, toys and gems and jewellery.

In labour-intensive sectors, tariffs on Indian exports to the UK have been slashed to nil from up to 20 percent on marine products, from 12 percent on textiles and apparels, from 8 percent on chemicals, and from 10 percent on baseline metals, the Indian government said.

UK will also slash tariffs on leather of up to 16 percent, helping India gain 5-percent of the market share in the sector in one to two years.

This will help unlock over $900 million in leather and footwear exports, according to the Indian government.

Britain has also eliminated tariffs on Indian tea, instant coffee and spices, while the zero-duty access for India's electronic products is expected to boost outbound shipments of smartphones, optical fibre cables and inverters.

In the food processing sectors, duties have been dropped to zero on 99.7 percent of tariff lines from as high as 70 percent, providing a boost to Indian exports. The free trade agreement with UK is expected to also increase Indian agricultural and food exports like fresh grapes, bakery items, nuts and sauces.

India expects the total bilateral trade with UK to double in 2030 from $56 billion currently thanks to the free trade agreement.

The agreement is expected to strengthen India’s position in high-growth sectors such as electronics, where products like smartphones, optical fiber cables and inverters will now have easier market access in the UK. Indian med-tech exporters are also likely to benefit, with medical devices such as x-ray and ECG machines becoming duty-free, lowering costs and enhancing competitiveness.

The textiles and apparel sector -- India’s second-largest employment generator -- is set to gain significantly. The Confederation of Indian Textile Industry (CITI) said the removal of import duties will help Indian exporters compete on an equal footing with countries like Bangladesh and Türkiye. “This FTA removes the duty handicap that was coming in the way of Indian exporters increasing their market share in the UK,” said CITI Chairman Rakesh Mehra.

The zero-duty access would benefit traditional weaving and artisan clusters in regions such as Panipat, Bhadohi, Agra, Kanchipuram, Bhagalpur, Varanasi and Jaipur. The agreement also strengthens intellectual property protection through geographical indication (GI) tags for heritage weaves like Banarasi, Chanderi and Kanjeevaram, paving the way for greater brand recognition in international markets.

India is currently the fourth-largest supplier of textile and apparel products to the UK, holding a 6.6 percent share in its total imports, which stood at around $27 billion in 2024. China led with 25 percent, followed by Bangladesh (15 percent) and Türkiye (8.5 percent). India’s share in the top 20 textile and apparel commodities imported by the UK remains at 4 percent, highlighting the scope for expansion under the new trade deal.

The chemical sector, another major beneficiary, expects a 30 to 40 percent growth in exports to the UK, with projections ranging from $650 million to $750 million in 2025–26, government said. Indian companies are also expected to deepen their integration into the UK’s chemical supply chain, bolstering their global footprint.

Toy exports are projected to rise by 15 percent as zero-duty access enhances cost competitiveness, the government said. Indian-made toys, including sports goods such as soccer balls, cricket gear, rugby balls and non-electronic toys, will become more attractive to UK buyers. Improved product standards are expected to build consumer trust, fuelling demand and supporting job creation in small-scale manufacturing units.

The deal also promises to boost India’s presence in the UK’s luxury goods market. Currently, India exports $941 million worth of gems and jewellery to the UK, of which jewellery alone contributes $400 million. With the elimination of tariffs, the industry expects exports to double over the next two to three years.

"The free trade agreement not only eliminates tariff barriers but also provides Indian exporters an opportunity to scale up their global market share in sectors where the country already has comparative advantages. It aligns with India’s broader export ambitions, including the goal of reaching $100 billion in textile and apparel exports by 2030," the CITI Chairman said.