India-UK FTA set to boost textile, leather and IT exports; concerns over liquor duty cuts

New Delhi: Exporters are anticipating a surge in India-UK bilateral trade following the free trade agreement, hoping it would further integrate Indian businesses into the global value chain. Labour intensive sectors such as textiles, leather, gems and jewellery, processed food, and pharmaceuticals are seen as the biggest beneficiaries along with IT and business services.

"The FTA with the UK is a bonanza for Indian apparel exporters. It opens the floodgates for apparel exports to the UK," said Sudhir Sekhri, chairman, Apparel Export Promotion Council (AEPC).

The India-UK FTA eliminates or significantly reduces tariffs on a wide range of Indian goods, giving exporters preferential access to one of the world's most affluent and consumption-driven markets.


In textiles and apparel, removal of tariffs is likely to enhance India's competitiveness against countries like Bangladesh and Vietnam, while Indian leather and footwear exporters would have greater access to high-end UK retail markets.

As per Federation of Indian Export Organisations (FIEO) president S C Ralhan, the FTA will boost India's handcrafted and diamond processing exports while streamlined regulatory processes will expedite generic drug approvals.

"In agriculture and processed foods, there will be better access for value-added products, including tea, spices, rice, and ready-to-eat segments," he said.

"India has secured significant commitments across sectors for service suppliers in digitally delivered services, especially in selected professional services such as architecture and engineering, computer-related services and telecommunication services," the government said.

"For the textile and apparel industry, they unlock fresh opportunities by reducing tariff barriers, encouraging technology exchange, and enhancing market access. The UK has long been a valued partner, and this framework will significantly boost bilateral trade, foster innovation, and create more sustainable and competitive supply chains," said Mukesh Kansal, Chairman, CTA Apparels.

India-UK bilateral trade in gems and jewellery is expected to double to $7 billion.

However, India's alcohol beverage industry has raised concerns over the sharp cut in import duties for British whiskies and gin under the trade deal, wherein the tariffs would be halved to 75%, before being further reduced to 40% by the end of the 10th year of the deal.