appConfigEntityId

bodyType

customContents

entityId

entityUuid

isVideo

articlePageQuery

article

articleSchemaContent

content

hooksArticlePageAdvertisementConfigArticle

hooksArticlePageFloatingButtonConfigArticle

appConfig

filter

json

liveArticle

Biman Mukherji

India’s free-trade agreement with the United Kingdom takes effect on Wednesday, delivering immediate tariff relief to businesses on both sides while giving New Delhi an early test of the concessions, compliance demands and implementation challenges it may face in future deals with other Western powers.
UK exports in sectors such as luxury vehicles and spirits are expected to benefit, while Indian textiles and leather products will gain as the agreement eliminates tariffs on 99 per cent of exports from India and reduces duties on 90 per cent of British goods, analysts say.
“The earliest benefits will be tariff reductions on goods, simplified customs procedures, and improved market access for businesses in the UK and India,” said Christopher Blackburn, a London-based analyst.
“Bureaucratic hurdles that have caused headaches in the past will be removed or reduced.”

But analysts caution that the India-UK Free Trade Agreement’s longer-term value will depend on how effectively both governments and businesses handle customs compliance, product standards and other practical barriers to trade.
The agreement offered a “practical blueprint” for resolving issues such as tariffs, services, mobility of people and regulatory cooperation, Blackburn said. “It’s good news for both sides.”
Total bilateral trade rose 10 per cent year on year to £47.9 billion (US$64.2 billion) by the end of 2025, making India the UK’s 11th-largest trading partner, according to the British government.
The deal is being implemented at a crucial juncture for India as a long-pending agreement with the United States, one of its largest trading partners, is still being finalised.
For the UK, the deal is equally important strategically because it eases access to one of the world’s largest consumer markets, analysts say.
“Businesses on both sides will benefit at a moment when the global economy is growing increasingly fragmented and unpredictable. The main challenge will be implementation,” said Uday Chandra, a political-science professor at India’s Ashoka University.
Indian industry has had a mixed record with free-trade agreements: labour-intensive sectors such as textiles and pharmaceuticals secured greater market access, while manufacturing industries dealt with import pressures.
The main challenge for smaller Indian companies with the UK agreement would be adapting to new criteria such as determining product origin and customs procedures concerning the application of tariffs and export quotas, Chandra said.

“Indian exporters will also have to meet British regulatory, environmental and quality standards. British firms will have to work through the complexity of the Indian market,” he said.
India’s trade and foreign investment regulations are often seen as intricate, requiring navigation of sector-specific caps and strict foreign exchange rules.
“The success of the [free-trade agreement] will, therefore, depend on the extent to which both governments resolve everyday obstacles to trade,” Chandra said.
Indian Prime Minister Narendra Modi and his British counterpart Keir Starmer signed the deal in July last year. British government estimates at the time suggested the pact could add £4.8 billion, or about 0.13 per cent, to the country’s gross domestic product.
Starmer resigned as UK prime minister and leader of the ruling Labour Party last month, but has continued to serve as a caretaker prime minister until a new Labour chief is selected.
Analysts say the political changes are unlikely to affect the trade agreement because it enjoys broad cross-party support in the UK.
Starmer has cited the trade pact as an important political achievement with one of the world’s largest and fastest-growing economies, Chandra pointed out.
Despite this, Chandra said Labour would still need to show that the deal “produces investments, export orders and jobs” to boost support for the party after its recent defeats in local elections.

Biswajit Dhar, an economics professor at Delhi’s Council for Social Development, said how the agreement was implemented would be equally or more important for India, though “on the face of it there are a lot of market opportunities for both countries”.
More importantly, he said Indian industry had to be ready to meet environmental and labour standards to fully tap the market opportunities offered by the trade deal.
India’s exports to the UK will be subject to a Carbon Border Adjustment Mechanism – a charge on carbon-intensive imports such as cement – that is scheduled to launch next year and scale up gradually, similar to the one implemented by the European Union.
Dhar said sectors in India such as iron and steel, fertilisers, cement, hydrogen and aluminium could be affected.
“We don’t have the preparedness. Our industries have not really looked at the global emission norms very seriously,” he said.
For Dhar, such readiness is particularly important because India and the EU are also expected to implement their free-trade agreement soon. The two sides concluded negotiations in January and are reviewing the treaty’s legal provisions.
Indian exports to the UK and the EU could also increasingly face stringent labour standards and sustainability requirements, driven by recent free-trade agreements and other laws, Dhar said.
The local industry would need to be sufficiently prepared to deal with such issues because India was set to conclude trade pacts with other major powers such as Canada and Australia that could enforce similar standards, Dhar said.
“All these issues have implications for other markets as well,” he said.

Delhi and Canberra have already implemented an interim deal called the Australia-India Economic Cooperation and Trade Agreement and announced plans for a broader free-trade pact.
Earlier in March, India and Canada formally relaunched trade negotiations for their Comprehensive Economic Partnership Agreement, following a diplomatic thaw after ties were strained three years ago over Ottawa’s accusations of Indian involvement in the assassination of Canadian Sikh activist Hardeep Singh Nijjar.
Chandra said the UK-India trade agreement would help Indian industry assess what it needed to do to take advantage of such deals.
“The UK agreement gives India valuable experience in implementing a comprehensive trade deal with an advanced Western economy. It also demonstrates that Delhi is willing to make significant concessions on tariffs, services, and government procurement when it receives meaningful market access in return,” he said.
“For British firms, there is a potential first-mover advantage. They will receive preferential access to India before the EU agreement is likely to enter into force later in 2026-27.”


India’s new P4M middle-power group enters a crowded field

Gulf tech firms turn to Hong Kong and Singapore as Iran war grinds on

Canada seeks to wrap up India trade talks soon, as US ties fray

Bukhara Biennial spearheads cultural blossoming of the city as well as the wider Uzbekistan

India

UK deal to serve as testing ground for India’s Western trade ambitions

Employees work at a garment factory in Bengaluru, India, in May. Indian textiles and leather products are expected to gain from the country’s trade deal with the UK. Photo: EPA

A worker arranges sugar bags in a net to load them onto a cargo ship at the Deendayal Port in Kandla, India’s Gujarat state, in September 2024. Photo: Reuters

Leather fabrics are stacked on a stand at a manufacturing unit in New Delhi. Indian goods will have to meet British regulatory and quality standards for export to the UK. Photo: Reuters

An employee prepares to move a heavy bar of steel inside a factory in West Bengal, India, in April 2024. Photo: Reuters

Indian Prime Minister Narendra Modi (left) and his Australian counterpart Anthony Albanese at the Melbourne Cricket Ground on Friday. Photo: Reuters

Indonesia-India BrahMos deal buys Jakarta conflict insurance

Indias Prime Minister Narendra Modi and Indonesia’s President Prabowo Subianto shake hands after attending a joint press conference at the Merdeka Palace in Jakarta on Tuesday. Photo: AFP

BrahMos cruise missiles jointly developed by India and Russia are displayed at a defence expo in Kronstadt near St. Petersburg, Russia, last month. Photo: EPA

India’s Prime Minister Narendra Modi and Indonesia’s President Prabowo Subianto shake hands after attending a joint press conference at the Merdeka Palace in Jakarta on Tuesday. Photo: AFP

A ship of the Indonesian Navy is seen moored in Bali before the opening of a multilateral naval exercise last year. Analysts say integrating the ship-launched BrahMos variant could prove challenging. Photo: AFP

India’s toxic crop waste could fuel global airlines, study finds

A technician refuels a private jet with sustainable aviation fuel at an airport. India’s crop residue could become a source to make the fuel for global airlines, a study says. Photo: Handout

Farmers working in a rice field on the outskirts of Srinagar in Indian-controlled Kashmir. India’s millions of tonnes of crop residue annually could be used to meet global demand for sustainable jet fuel. Photo: AP

Air India planes parked at Indira Gandhi International Airport in New Delhi. India’s domestic aviation sector can meet its operational needs through green fuel made from crop waste. Photo: AP

Are India-US trade talks nearing ‘last-mile bargaining’ amid strained ties?

Shipping containers are stored at a port in Navi Mumbai, India, in February 2025. Photo: Reuters

US Trade Representative Jamieson Greer is expected to meet Indian Commerce Minister Piyush Goyal to discuss a bilateral trade agreement. Photo: Getty Images via AFP

How the India-UK trade deal could shape future pacts with the EU and US

Britain’s Chancellor of the Exchequer Rachel Reeves (right) greets Indian Finance Minister Nirmala Sitharaman during the India-UK Economic and Financial Dialogue at the London Stock Exchange on April 9. The two sides are expected to finalise a broader trade agreement during Prime Minister Narendra Modi’s visit this week. Photo: AFP

Britain’s Business and Trade Secretary Jonathan Reynolds meets Indian Commerce Minister Piyush Goyal for trade talks in London on April 28. Photo: Reuters

This Week in Asia

Economics

News

Asia

South Asia

The pact will be a ‘practical blueprint’ for resolving issues such as tariffs, services and regulatory cooperation, analysts say


The pact will be a ‘practical blueprint’ for resolving issues such as tariffs, services and regulatory cooperation, analysts say.


UK deal to serve as testing ground for India’s Western trade ambitions

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}The pact will be a ‘practical blueprint’ for resolving issues such as tariffs, services and regulatory cooperation, analysts say

The pact will be a ‘practical blueprint’ for resolving issues such as tariffs, services and regulatory cooperation, analysts say