How will India-UK FTA impact Indian economy? Sectors like agriculture, pharma, jewelry, electronics will be…

Narendra Modi and British Prime Minister Keir Starmer signed India-Uk FTA in London.

The Indian-UK Free Trade Agreement (FTA) will unlock the major export opportunities for several key Indian sectors, and will offer zero-official market access and a flat playground in the major and various import markets of the UK. The food processing sector, which includes processed agricultural and food products, receives a 10.1 percent share within the scope of FTA scope with its 985 tariff line. This sector plays a valuable role in the agricultural-world supply chain. India is currently exporting $ 14.07 billion of food processing products globally, while the UK is importing US $ 50.68 billion.

However, Indian exports to the UK are only 309.5 million US dollars and show a strong space for growth under FTA. India’s plantation sector is expected to provide great benefit. The UK is already buying 1.7 percent of India’s coffee, 5.6 percent of tea and 2.9 percent of spices exports. While there is now a customs -free access, these numbers are likely to grow rapidly. In particular, customs -free access to Instant Coffee will help Indian exporters better compete with European suppliers such as Germany, Spain and the Netherlands.

Engineering goods are the largest category within the scope of FTA with 1,659 tariff line and 17 percent share. This includes machinery, equipment and components that emphasize the importance of the sector. England is already the 6th largest market for India’s engineering exports. This exports increased by 11.7 percent in 2024-25 and FTA is expected to increase this acceleration further. India’s electronic exports, including smartphones, optical fiber cables and inverters, are expected to increase with zero -official access.

FTA is expected to force the software services growth. The UK’s strong commitment to software and CT feature services can help Indian companies enter new markets. This sector is expected to grow by 15-20 percent annually and exports are worth US $ 32 billion in 2024-25. Although the pharmaceuticals constitute only 0.6 percent of tariff lines (56 lines), the sector is strategically important. India globally exports 23.31 billion drugs, while the UK imports almost $ 30 billion. However, India Farma exports to England are below US $ 1 billion and show strong growth potential.

There are 1,206 tariff lines under FTA in the chemical sector and constitutes 12.4 percent of the total scope. Products include fertilizers, petrochemicals and industrial chemicals. India’s chemical exports to England are currently $ 570.32 million, only 2 percent of India’s global chemical exports.

However, FTA is expected to increase this exports by 30-40 percent and reach US $ 650-750 million in the 2025-26 fiscal year. India’s jewels and jewelery exports to England are valued as US $ 941 million, and jewels account for only $ 400 million. The UK is imported in jewels of $ 3 billion every year. With FTA’s tariff loosening, India’s jewels and jewelery exports are expected to double in the next 2-3 years. In general, FTA is a major step in increasing India’s export potential between key sectors, helping MSME and major exporters gain better market access, increase competitiveness and increase growth.

(Except the title, this story was not arranged by DNA staff and published from the moment.)