What's getting cheaper after India-UK FTA: From clothes and jewellery to scotch; check full list

Prime Minister Narendra Modi and UK's Prime Minister Keir Starmer

When Britain’s Keir Starmer hosts Prime Minister Narendra Modi at his 16th century country retreat at Chequers, all eyes will be on the much-anticipated Free Trade Agreement.  India’s commerce Minister Piyush Goyal and his British counterpart Jonathan Reynolds are set to sign the deal tomorrow.

The agreement is poised to be the centrepiece of PM Modi’s short yet crucial trip. The India-UK FTA aims to deepen economic engagement by reducing trade barriers, improving market access, and encouraging investment across critical industries.

A range of sectors in both countries are poised to benefit from this agreement. Here’s a breakdown of the key areas that will gain from the deal:

1. Textiles & Apparel

Tariffs ranging from 8–12% on Indian clothing and home textiles exported to the UK will be eliminated. This move is expected to make Indian products more competitive compared to exports from countries like Bangladesh and Vietnam. Export hubs such as Tiruppur, Surat, and Ludhiana are projected to see up to 40% growth over the next three years.

2. Gems, Jewellery & Leather

High-value products like gold and diamond jewellery, as well as leather goods, will gain duty-free access to the UK. This is expected to significantly support MSMEs and luxury brands, while also strengthening India’s presence in European markets through the UK.

3. Engineering Goods & Auto Components

The UK will scrap import duties on Indian-made machinery, engineering tools, and auto parts, enhancing India’s participation in UK and European industrial supply chains. Key manufacturing zones such as Pune, Chennai, and Gurgaon are likely to benefit.

4. IT & Professional Services

Relaxed visa norms and recognition of professional qualifications in fields such as engineering, architecture, and accounting will lead to greater mobility for Indian professionals. This could result in the creation of 60,000 new service-sector jobs over the next five years in areas like IT, finance, law, and healthcare.

5. Pharmaceuticals & Medical Devices

Indian pharma companies will benefit from streamlined regulatory processes in the UK, especially for generic drugs. This could open up greater access to the NHS and accelerate drug approvals for Indian firms.

6. Food Processing, Tea, Spices & Marine Products

Import duties will be scrapped on a range of Indian agricultural and food exports, including basmati rice, marine items like shrimp, and premium teas and spices. This will support export-driven industries in regions such as Assam, Gujarat, Kerala, and West Bengal.

7. Chemicals & Speciality Materials

Lower tariffs on agrochemicals, plastics, and specialty chemicals are expected to boost exports from key hubs in Gujarat and Maharashtra. India aims to double its chemical exports to the UK by 2030 under this deal.

8. Green Energy & Cleantech

The agreement will pave the way for joint ventures in renewable energy, including solar, green hydrogen, and EV infrastructure. The UK is expected to increase investment in India’s clean energy sector, promoting co-development of innovative technologies.

9. Alcoholic Beverages (UK Benefit)

India will gradually lower tariffs on Scotch whisky from the current 150% to 30% over a ten-year period. This will significantly expand the UK’s market share in India, while also offering Indian consumers and hospitality businesses access to lower-priced imports.

The signing of this FTA at Chequers House marks a significant diplomatic and economic milestone, turning a new page in the India-UK relationship.