Which Sectors Will Win Big In The UK Market? Details Inside

India and the United Kingdom officially inked their much-anticipated Free Trade Agreement (FTA) on Thursday in London, marking a major milestone in bilateral economic relations. The signing ceremony was held during Prime Minister Narendra Modi’s two-day official visit to the UK and was attended by his British counterpart, Prime Minister Keir Starmer.

This Free Trade Agreement (FTA) between India and the United Kingdom is poised to transform India’s export landscape by offering zero-duty market access and a more equitable footing in one of the world’s most mature import markets.

Boost For Food Processing Sector

A major beneficiary of the deal is India’s food processing sector, which includes a wide array of processed agricultural and food items. This sector represents 10.1 per cent of the FTA’s scope, encompassing 985 tariff lines. India currently ships food processing goods worth $14.07 billion globally, while the UK imports food products worth $50.68 billion. Despite this, India’s exports to the UK stand at just $309.5 million, revealing vast untapped potential. The agreement is expected to help bridge this gap and enhance India’s role in the UK’s food supply chain.

Opportunities For Plantation Products

India’s plantation commodities—tea, coffee, and spices—are also set to gain. Presently, the UK accounts for a modest share of India’s exports in these categories. However, with tariffs now eliminated, shipments of these goods are expected to climb rapidly. Notably, instant coffee exporters are likely to benefit from better competitiveness against European players such as Germany and the Netherlands.

Engineering Sector Leads In Coverage

Engineering goods form the largest share under the FTA, covering 1,659 tariff lines or 17 per cent of the total. This includes vital categories like machinery and industrial equipment. The UK is already India’s sixth-largest market for engineering exports, which grew by 11.7 per cent in FY 2024-25. With the removal of trade barriers, this growth is expected to accelerate further.

Electronics And Software Set To Gain

India’s electronics industry—including smartphones, optical fibre cables, and power inverters—will now benefit from duty-free access. The agreement is also expected to fuel growth in India’s software and IT-enabled services (ITES) exports. With strong UK commitments in this domain, the sector—currently valued at $32 billion—is projected to expand at an annual rate of 15-20 per cent.

Pharmaceuticals And Chemicals See New Potential

While pharmaceuticals represent only 0.6 per cent of the FTA’s tariff lines, their strategic value is significant. India exports over $23 billion worth of pharmaceuticals globally, but less than $1 billion reaches the UK. The agreement is expected to open new avenues in this high-value sector. Similarly, the chemicals industry—covering 1,206 tariff lines—could see a 30-40 per cent increase in exports to the UK, reaching an estimated $ 650–750 million in FY 2025-26.

Also Read: India, UK Sign Historic Free Trade Agreement During PM Modi’s London Visit

Jewellery Exports Expected To Double

India’s gems and jewellery exports to the UK currently stand at $941 million, with jewellery making up nearly half of that figure. Given that the UK imports roughly $3 billion in jewellery annually, India’s exports in this segment could potentially double within the next two to three years, thanks to the FTA’s tariff concessions.

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