— by Vineet Rathi, Managing Partner, Kreston OPR Advisors LLP
The UK–India Free Trade Agreement (FTA), concluded on 6 May 2025, marks a decisive moment in global trade. For Indian and UK businesses alike, it signals a structural shift—lowered tariffs, enhanced services access, and new mobility frameworks that unlock real potential for expansion. At Kreston OPR, we don’t just see the headlines—we see where pragmatic action meets opportunity.
Why This FTA Matters — And Why Now
This deal stands as the most economically significant bilateral FTA for both countries in recent times. The UK government projects an annual GDP gain of approximately £4.8 billion and real wage growth of £2.2 billion, with bilateral trade expected to rise by about £25.5 billion a year by 2040. India, on its part, will eliminate tariffs on 99% of its export lines to the UK—unlocking duty‑free access for textiles, leather, marine products, gems, and auto parts. Conversely, India will reduce tariffs on 90% of UK goods, benefitting whisky, gin, medical devices, cars, and cosmetics.
But it’s important to keep in mind: a trade deal is only as powerful as its execution. And that begins with understanding the details.
Know the Nuances
Let’s call a spade a spade. Not everything is immediate or perfect.
- The automotive sector enjoys quota‑based access—tariffs fall from over 100% to around 10%, but the actual quota volumes have not yet been disclosed. That leaves exporters with some ambiguity.
- The National Insurance waiver (Double Contributions Convention) for Indian professionals is a win on paper, but comes with trade-offs. While professionals save on dual contributions, they may not accrue UK pension benefits.
- Some areas—legal services and pharmaceuticals, for instance—have been excluded from full liberalisation. Market entry here will depend on regulator-level agreements, not blanket policy.
These gaps don’t negate the FTA’s value, but they do highlight the importance of strategic navigation.
Sector-Wise Opportunity: A Closer Look
Indian exporters are set to benefit across several sectors:
Textiles & Apparel: With import duties of 10–12% scrapped, Indian textile exporters will find themselves competitive with players from Bangladesh and Vietnam. Key hubs like Ludhiana, Tiruppur, and Surat stand to gain the most.
Leather, Gems & Jewellery: MSME clusters in Kanpur, Moradabad, and Jaipur now gain enhanced duty-free access to UK luxury markets—boosting both exports and employment.
Auto Components & Engineering Goods: With nearly all tariff lines eliminated, these sectors will see improved integration with UK-based supply chains. Compliance costs, however, remain a challenge.
Services (IT, Consulting, Finance): Market access is stronger than ever, especially in financial and consulting services. UK procurement markets, valued at nearly £38 billion annually, will now be more accessible to Indian firms.
UK exporters, too, stand to gain significantly:
- Whisky & Gin: Tariffs will drop from 150% to 40% over 10 years.
- Luxury Automobiles: A phased tariff reduction from 100%+ to 10%—albeit under quotas.
- Advanced Medical Devices: Strategic access to Indian healthcare markets.
- Education & Financial Services: Expansion through liberalised services and mobility clauses.
What Kreston OPR Brings to the Table
With over four decades of experience bridging Indian and UK markets, Kreston OPR has been more than a service provider—we’ve been a growth partner.
We offer: – Cross-border structuring and entity setup tailored to FTA rules of origin. – Tax and regulatory advisory, including FEMA/RBI compliance, transfer pricing, and duty benefits. – Audit and assurance services grounded in both Indian and UK GAAP. – Outsourced CFO and accounting, ideal for SMEs and fast-scaling businesses. – Digital transformation support for trade automation, invoicing, and documentation. – HR and mobility services to navigate professional relocation and National Insurance exemptions.
Our integrated presence in India and linkages with UK member firms through Kreston Global allow us to offer seamless execution on both ends of the trade corridor.
Getting Started: Your First Steps
Start by assessing your current trade exposure:
- Which parts of your supply chain are eligible for tariff savings?
- Do you understand the rules of origin and compliance frameworks involved?
- Are your certifications up to UK and Indian regulatory standards (CE, BCI, Oeko‑Tex)?
- Do your service offerings qualify under the new mobility and licensing frameworks?
- Most importantly: are you ready to move fast when this FTA is ratified (expected late 2025 or early 2026)?
Final Word: Not a Silver Bullet—But a Tool. Use It Wisely.
This FTA is not a shortcut. It’s a sophisticated tool—one that demands preparation, strategy, and smart execution. Used right, it can reshape your growth story across borders.
At Kreston OPR Advisors LLP, we’re ready to walk that journey with you. Let’s convert this policy into real outcomes.
If you’re exporting, importing, investing, or planning to deploy talent across borders—you should talk to us now.