We have our LogX Networks member, Dr. Ambrish Kumar from Zipaworld providing his expert opinion for the current India-UK Trade Deal. Please read below to understand better the current situation, and how the companies in these markets can get the benefit and growth with this deal.
1. The India–UK trade deal is expected to create major export opportunities. Which sectors in India do you see benefiting the most in the next 2–3 years?
The India-UK FTA presents exceptional opportunities across multiple sectors, with labour-intensive industries positioned to gain the most immediate benefits;
Textiles and Apparel. With complete elimination of duties ranging from 4-16%, Indian textile exports are projected to double from current levels of $1.79 billion. Woven apparel exports could grow from $753 million to $1.6 billion by 2027, while knitted apparel may rise from $654 million to $1.13 billion.
Marine Products and Seafood: This sector will see remarkable growth with zero tariffs on 99.3% of Indian seafood exports, previously facing duties up to 20%. Marine product exports are expected to increase from $107 million to $185 million, with potential for 70% growth in UK market share.
Gems and Jewellery; The removal of UK duties up to 16% positions this sector for substantial expansion. Current exports of $941 million to the UK are projected to reach $2.5 billion within two years, with bilateral trade in the sector expected to hit $6 billion.
Engineering Goods and Auto Components; These sectors will benefit from zero tariffs, with auto components exports potentially doubling from $286 million to $572 million by 2027.
Pharmaceuticals and Chemicals; Chemical exports to the UK are projected to surge 30-40% to $650-750 million in FY26, while pharmaceutical companies will strengthen their position in Europe's largest market outside the EU.
2. How do you expect the tariff cuts and easier market access to impact your export or import business?
The tariff reductions under this FTA are transformative. India has secured duty-free access for 99% of its exports to the UK, covering nearly 100% of trade value.This elimination of tariffs creates immediate competitive advantages for Indian manufacturers who previously faced duties ranging from 4-16% on various products
Key impacts include:
Enhanced Competitiveness: Indian exporters will gain significant pricing advantages over competitors from Bangladesh, Vietnam, and other countries in the UK market
Reduced Compliance Costs; Streamlined customs procedures and simplified regulatory processes will reduce time-to-market and operational expenses
Market Share Growth: In textiles alone, India is expected to capture at least 5% additional market share within two years
The UK's average tariff on Indian goods drops from 15% to 3%, while India reduces tariffs on 90% of UK products, with 85% becoming fully tariff-free within a decade.
3. Do you anticipate an increase in collaborations with UK partners because of this agreement?
The FTA significantly enhances prospects for deeper UK partnerships across multiple dimensions
Technology and Innovation Partnerships; The agreement lays groundwork for closer cooperation in artificial intelligence, health technologies, quantum computing, and data science. Indian firms can establish R&D hubs in the UK while UK companies gain greater access to India's dynamic tech sector.
Investment Collaborations: The deal unlocks nearly £6 billion in new investment and export opportunities, supporting over 2,200 UK jobs and driving expansion of Indian companies' UK operations.
Services Sector Integration: Enhanced market access in IT, financial services, legal services, and professional consulting will deepen cross-border collaboration, with approximately 60,000 Indian professionals expected to work in the UK annually
Government Procurement: Access UK companies can now bid on approximately 40,000 Indian federal government contracts worth over ₹200 crore, opening substantial opportunities for infrastructure and clean energy collaborations.
4. What challenges do you foresee Indian businesses might face in taking full advantage of the deal?
Despite the substantial opportunities, several challenges require careful attention
Carbon Border Adjustment Mechanism (CBAM): The UK's planned carbon tax starting in 2027 could impact Indian exports worth approximately $775 million, particularly in steel, aluminium, cement, and fertiliser sectors. The FTA doesn't provide exemptions from CBAM, creating potential trade imbalances.
Implementation Capacity: Small and medium enterprises may struggle to meet enhanced quality standards, regulatory compliance requirements, and documentation processes required for UK market access.
Infrastructure Constraints: Existing logistics infrastructure, including ports, warehouses, and transportation networks, may face strain from the anticipated surge in trade volumes.
Bilateral Investment Treaty Delay; The unresolved status of the India-UK Bilateral Investment Treaty could impact investor confidence and bilateral investments, as dispute resolution and investment protection mechanisms remain unclear.
Non-Tariff Barriers; While the FTA addresses many regulatory obstacles, ongoing challenges with technical standards, sanitary measures, and conformity assessment procedures may still impede smooth trade flows.
5. How do you think logistics providers like yourself can play a bigger role in facilitating this trade growth?
Logistics providers are positioned to play a pivotal role in realizing the FTA's potential, with several key opportunities emerging
Capacity Expansion: As bilateral trade targets $120 billion by 2030, logistics firms will need substantial investments in warehouses, cold chain facilities, and distribution centers. Demand is expected to soar particularly in pharmaceuticals and chemicals sectors
Digital Infrastructure Development: The FTA's commitment to 48-hour customs clearance and paperless trade creates competitive advantages for logistics providers with advanced digital platforms offering real-time tracking and customs compliance capabilities
Specialized Service Offerings: Growth in sector-specific logistics requirements includes:
- Cold chain logistics for UK whisky and beverage exports to India
- Ro-Ro vessel services for automotive trade (310% growth expected)
- Project cargo handling for machinery and equipment
- Multi-origin shipping for textile and leather exports
Cross-Border Integration: Simplified customs procedures and reduced non-tariff barriers enable logistics providers to offer more efficient, predictable supply chain solutions, reducing lead times and improving reliability.
Regional Hub Development: The agreement positions both countries as strategic hubs - the UK for European market access and India for broader Asian market penetration;
The India-UK FTA represents a transformative opportunity that extends far beyond traditional tariff reductions. Success will depend on our collective ability to build robust implementation frameworks, invest in necessary infrastructure, and foster the collaborative partnerships that this historic agreement enables.
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