New Delhi, July 3 (KNN) The Free Trade Agreement (FTA) between India and the United Kingdom is expected to significantly bolster Indian exports, facilitate worker mobility, and deepen economic engagement with the UK, according to a report released by S&P Global Market Intelligence on Wednesday.
Highlighting the strategic value of the agreement, S&P noted that the FTA aligns with India鈥檚 broader efforts to diversify trade relationships amid shifting global trade dynamics.
It anticipates that expanded Indian merchandise and manufacturing exports鈥攑articularly textiles and apparel鈥攚ill benefit from improved access to the UK market, offering an alternative to the US where exporters face persistent entry barriers.
The India-UK FTA aims to double bilateral trade in goods and services by 2030, up from the USD 56.7 billion recorded in 2024.
Among its key provisions, the deal includes enhanced mobility for Indian professionals, including a waiver from the UK’s national insurance scheme for information and communication technology (ICT) workers for up to three years.
This measure, S&P said, is likely to strengthen remittance inflows to India and support domestic consumption and the current account.
Indian remittances stood at approximately USD130 billion in 2024鈥攁bout 3.3 percent of GDP鈥攚ith the UK ranking as the third-largest source after the US and UAE.
For the UK, the FTA offers incremental access to India鈥檚 rapidly growing middle-class market, although immediate benefits are expected primarily in the alcoholic beverages sector.
Under the agreement, tariffs on 97 percent of UK beverage exports to India鈥攊ncluding whisky and gin鈥攚ill be halved.
However, the report notes that operational ambiguities remain regarding the tariff quota regime for UK automotive exports, and the exclusion of pharmaceutical products from the deal limits potential GDP gains for the UK.
(KNN Bureau)