In May 2025, the United Kingdom and India concluded a Free Trade Agreement (FTA), slashing Indian tariffs on key products. The deal is expected to benefit UK exports, increase bilateral trade, boost GDP, and raise wages in the long term. UK companies will be able to export more easily to India, which has agreed to release goods as quickly as possible upon customs arrival.
A wide range of products will see tariff export cuts
90 % of Indian tariff lines will be reduced, with 85% of them becoming fully tariff-free within the next 10 years. In particular, the changes include:
- Reduced tariffs for cosmetics, medical devices, electrical machinery, aerospace goods as well as certain foods and drinks.
- Automotive tariffs to decrease from over 100% to 10%.
A strategic partnership set to deliver growth
India currently has the highest GDP growth rate among G20 countries. It is the fifth-largest economy in the world and is projected to become the third-largest in the coming years. Nonetheless, India has the highest average tariffs among G20 economies. With the newly reached deal, UK businesses will gain a more favourable position over international competitors when entering the Indian market.
The trade agreement is not yet in force. Both the UK and India are working together to finalise the legal text and treaty.
Opportunities for businesses
Manufacturers of medical devices or cosmetics, whether based in the UK or India, may see this as an opportune time to enter each other’s markets. While regulatory provisions will remain in place, companies will soon be able to benefit from significantly lower tariffs.
For regulatory support, representative services, or any questions on the matter, please contact us.
References:
Gov.uk (2025). Policy paper. UK-India trade deal: conclusion agreement summary. Retrieved on 19/08/2025.
Gov.uk (2025). UK concludes trade deal with India. Retrieved on 19/08/2025.
Simona Varrella
Regulatory Intelligence & Innovation
21/08/2025