India-UK FTA offers big opportunity, but implementation gaps remain: Industry

As the India-UK Free Trade Agreement (FTA) came into force on Wednesday, industry stakeholders welcomed it but said its long-term success would ultimately depend on the effective resolution of implementation challenges, particularly those involving technical standards, rules of origin, and sanitary regulations.

The India-UK Comprehensive Economic and Trade Agreement (CETA) is expected to eliminate tariffs on 99% of tariff lines, improve market access across goods and services, and strengthen investment and supply chain partnerships between the two countries.

India-UK bilateral trade in goods an services stands at about $55-60 billion, with both sides targeting $100 billion by 2030.


Prime Minister Narendra Modi described the India-UK CETA as “a historic milestone” in bilateral relations, saying it would significantly boost trade and investment between the two countries. In a post on social media platform X, Modi said the agreement would unlock new opportunities for Indian farmers, workers, MSMEs, start-ups and innovators, while contributing meaningfully to the realisation of the Viksit Bharat 2047 vision.

The Compound Livestock Feed Manufacturers Association (CLFMA) of India said while the agreement provides a strong framework for expanding bilateral trade, businesses require greater clarity on implementation, especially in the agriculture and livestock sectors. “The agreement provides the framework, but many technical import conditions will continue to be governed by domestic regulations and competent authorities,” said Divya Kumar Gulati, Chairman of CLFMA of India.

He said exporters need detailed operational guidance on product-specific import requirements, veterinary health certificates, certification procedures, inspection protocols, and equivalence arrangements for animal and livestock products. According to Gulati, such clarity would be essential for enabling commercial exports of dairy, meat, poultry, and other livestock products while ensuring compliance with the UK’s stringent food safety and animal health regulations.

The industry body also highlighted Rules of Origin (RoO) as another area requiring greater clarity. Gulati added that businesses need sector-specific guidance on value-addition thresholds, documentation requirements, certification processes, cumulation provisions and compliance procedures, particularly for processed food, animal feed, veterinary products and other value-added agricultural exports. Clear implementation guidance, he said, would help businesses fully utilise the agreement’s preferential tariffs while minimising compliance risks.

Despite these concerns, CLFMA said the agreement establishes a stronger platform for regulatory cooperation, enabling smoother trade in animal health products, feed ingredients, genetics, and livestock technologies. The association said India is expected to benefit from greater access to advanced UK expertise in animal breeding, veterinary pharmaceuticals, feed additives, precision livestock farming, disease surveillance, cold chain infrastructure, and sustainable livestock production systems.

It added that farmers, fisherfolk, MSMEs, and food-processing industries are expected to gain improved access to premium UK markets under the agreement.

CLFMA said reduced trade barriers and improved market certainty are expected to encourage long-term commercial partnerships, research collaborations and investment in livestock innovation. It added that the agreement’s emphasis on internationally recognised food safety, animal health and quality standards would help strengthen resilient agri-food supply chains between India and the UK while accelerating technology exchange and creating long-term value for producers, processors and agribusinesses in both countries.

The All India Medical Device Association (AiMeD) lauded the CETA with “cautious optimism”. “We welcome it with cautious optimism. It offers opportunities for Indian medical device exports to grow, but we remain concerned about the risk of third-country manufacturers routing competitive imports via the UK under reduced duty access. Indian industry can compete fairly with British devices, yet our nascent medical devices sector, already import-dependent, needs policy safeguards to prevent circumvention and ensure Make in India gains are not undermined,” said Rajiv Nath, Forum Coordinator, AiMeD.

He added that India’s medical device imports from across the world rose 17% last year to Rs 89,000 crore from Rs 77,000 crore. India’s medical device exports to the UK currently remain stagnant at around $130 million, while imports from the UK stand at $227 million, he said.

Ashok Rajani, Managing Director and Partner at BCG, said the agreement marks a significant milestone for India’s export sector but stressed that the next phase would be about converting preferential access into long-term manufacturing competitiveness. “CETA marks a defining moment in India’s export journey. More importantly, it shifts the conversation from preferential access on paper to preferential access in practice,” he said.

“We are already seeing early signs of this momentum, with textile and garment orders from the UK up 12% year-on-year, leather goods and footwear orders up 20%, and the gems and jewellery industry targeting exports of around $2.5 billion over the coming years. As tariffs ease across sectors such as textiles, leather, chemicals and pharmaceuticals, the real opportunity now lies in converting this early momentum into durable manufacturing capacity, particularly by helping MSME exporters build capabilities around compliance, standards, and traceability. If implemented well, CETA can become a template for how India scales both manufacturing and services exports while integrating more deeply into global value chains,” Rajani added.

Independent trade expert Manasvi Srivastava called the agreement a “win-win” on the goods front, with Indian exports such as garments, leather goods, jewellery, shrimps, and auto parts expected to benefit from preferential market access. He noted that in several of these sectors, India would now get a level playing field with competing developing countries. He said one of the biggest gains under the agreement lies in services.

“A very significant benefit for India is enhanced market access to the services sector, wherein CETA provides for institutionalisation of national treatment (non-discrimination from domestic service providers) to many sub-sectors. In the case of services, the exemption for temporary workers from compulsory payment into social security contributions is also a big win for India under CETA,” Srivastava said.

However, he said FTA’s implementation would remain crucial. “Perhaps greater focus on technical barriers like certifications, standards, quality control orders (QCOs) and mutual recognition agreements would help. This is an area that, if left unaddressed, can significantly reduce the market access promised by CETA.”

Srivastava also suggested introducing a direct reference to the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 (CAROTAR), saying it would generate greater confidence in implementing the agreement “in letter and spirit”.

“As FTAs do not have penal enforcement mechanisms (unlike a rules-based multilateral trading system), they are only as effective as the national officials want them to be. Hence creating clarity and predictability on these two aspects would help,” he said.

Nirmal K. Minda, President of industry body ASSOCHAM, said the agreement is expected to unlock significant opportunities for businesses in both countries. “India-UK trade will expand in a steady mode as this FTA ensures tariff elimination for 99% tariff lines and covers nearly 100% of trade value, including textiles, leather, marine products, gems and jewellery, toys, engineering goods, chemicals and auto components. It has overcome disagreements related to British trade restrictions on steel and unlocked tariff-free access for India’s steel exports,” Minda said.

He, however, pointed to India’s historically low utilisation of free trade agreements as a concern. “The only concern is the low utilisation rate of India’s FTAs so far. However, with respect to this agreement, we have noted that the government has indicated deployment of 1,000 advisory personnel across India to help businesses maximise India-UK CETA, and our Commerce Minister has recently released the UK-India CETA Business Utilisation Manual, which is a practical activation guide for Indian and UK businesses.”