The UK–India Trade Agreement: what businesses need to know

What businesses need to know

The new UK-India Free Trade Agreement (FTA) signed on July 24, 2025, is a landmark deal designed to significantly boost trade, jobs and economic growth between the two countries. It eliminates tariffs on 99% of Indian tariff lines and reduces tariffs on 90% of UK tariff lines, creating substantial benefits for businesses on both sides. Here Siddharth Dhawan, Vice President & Commercial Head, Vistra India, looks at why this agreement marks a significant turning point in trade and investment between the two countries.
 

A new chapter in UK-India economic relations

The UK–India Free Trade Agreement is about much more than cutting tariffs. It signals the intent of two democracies looking at each other not just as trading partners, but as long-term allies in growth. For Britain, it opens doors to India, now the world’s fourth-largest economy and one of the strongest engines of global expansion. British companies are already deepening their presence in India. Standard Chartered and HSBC are building deeper roots in banking and financial services. Energy majors like BP and Shell are investing in clean fuels and EV infrastructure. Diageo, through United Spirits, is betting on India’s growing appetite for premium brands. In retail, Marks & Spencer and Tesco are strengthening ties with Indian conglomerates, while in aerospace and engineering, Rolls-Royce and BAE Systems are supporting India’s defence and manufacturing ambitions. Even higher education is part of the story, with UK universities such as the University of Southampton (Gurugram), the University of Liverpool (Bengaluru), and the University of Aberdeen (India’s first Scottish campus, expected by 2026) preparing to set up campuses under the new regulations. British companies are placing long-term bets on India’s scale, talent and ambition at exactly the moment when the FTA is about to make market access faster, smoother and more rewarding. 

Projected trade growth and economic impact

The UK–India Comprehensive Economic and Trade Agreement (CETA) was officially signed on 24 July 2025. According to the UK Government summary of the the trade deal, the agreement is expected to increase bilateral trade by £25.5 billion each year, building on the current trade value of around £43 billion. The deal signals a historic shift in global commerce and in bilateral trade to create a new era of opportunity. The UK–India FTA will make trade easier by cutting tariffs and reducing red tape. Around 90% of tariff lines will be removed or reduced, covering 92% of India’s imports from the UK. The agreement also aims to cut paperwork and speed up customs processes. Both countries have committed to releasing goods from customs within 48 hours, provided all requirements are met.

The FTA is further projected to boost the UK’s Gross Domestic Product (GDP) by 0.13%, equivalent to £4.8 billion and India’s GDP by 0.06%, equivalent to £5.1 billion per year in the long run. India’s demand for global imports is estimated to increase to £2.8 trillion by 2050, making it the third largest importer in the world. The FTA’s improved market access and reduced regulation are expected to create major opportunities for UK businesses and consumers.
 

Sector opportunities created by the UK-India FTA

Job creation and global supply chain effects

The agreement is expected to create around 2,200 new jobs in the UK particularly in aerospace, technology and advanced manufacturing. In India, experts predict a large number of new jobs in manufacturing, IT, education and services.

The UK–India FTA is not only beneficial for the two countries directly involved. Together with India’s recently implemented GST reforms, it sends a powerful signal to global companies connected with the UK. Multinationals that rely on the UK as a part of their global supply chain are now looking at India not just as a consumer market, but as a strategic manufacturing hub. The combination of tariff reductions, simplified taxation, and pro-business reforms positions India as an attractive base for production and regional distribution.

Why this moment matters 

The India-UK FTA goes beyond goes beyond tariff reductions, it’s about trust, growth and shared ambition. With the deal signed and set to roll out by early next year, now is the time for businesses, investors and universities to get ready. Early movers will shape the future of this corridor. Overall, 17 foreign universities have been approved by the UGC under the regulatory changes to establish campuses in India. 

This means:

• Accessible UK Education in India – World-class learning locally, lowering relocation costs while enabling joint degrees, research, and faculty exchange.
• Enhanced Mobility & Careers – Streamlined visas, mutual recognition of qualifications, and industry-linked programs with global internships and work opportunities.
• Strategic Hubs for UK Universities – Expanding presence in India through partnerships with public and private institutions.

Navigating the challenges of UK-India FTA 

While the opportunities are exciting, the UK–India corridor also brings complexity.

At Vistra, we guide organisations through regulatory and compliance requirements, ensuring smooth market entry and ongoing governance. Our tax experts create efficient cross-border structures and repatriation strategies, while our HR and mobility teams support payroll, social security and staff movement between India and the UK. In short, we handle the complexities so you can focus on growth, whether you are a manufacturer exploring tariff-free trade, a service provider entering a new market, or a university setting up a new campus. Vistra provides end-to-end support every step of the way.

Here at Vistra, our purpose is progress. As a close ally to our clients, our role is to remove the friction that comes from the complexity of global business.

Contact a Vistra expert today and discover how we can accelerate your progress, improve your processes and reduce risk, wherever your ambition takes you. 

About the Author 
Siddharth Dhawan is the Commercial Head at Vistra India, where he supports global companies and institutions in navigating the complexities of both Indian and international markets. With his expertise in corporate services and with in-house team of experts, he helps organisations turn opportunity into long-term growth.