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Historic India-UK Free Trade Pact Turbocharges Growth for Labour, MSMEs, Startups

Masum Ali Published Jul 25, 2025, 12:05 AM Updated Sep 17, 2026, 11:25 PM

India and the UK have inked a historic Free Trade Agreement (FTA), which will transform bilateral trade, empower Indian workers, MSMEs, and startups. Commerce Minister Piyush Goyal referred to the agreement as a "game-changer," and it "unlocks massive opportunities while protecting all Indian interests." The agreement will double the trade to $112 billion by 2030 and was negotiated after prolonged negotiations, led by Prime Ministers Narendra Modi and Keir Starmer in London.

Key Highlights

99% Duty-Free Access: Almost all Indian exports such as textiles, leather, toys, gems, and ocean products will now be imported duty-free into the UK, benefiting the earnings of wage workers, MSMEs, and artisans.

Boost to Labour-Intensive Industries: Labour-intensive industries like footwear, handicrafts, and engineering goods receive a significant boost, with a potential 5% extra UK market share within 2 years.

Opportunities for Startups: The agreement opens Indian startups to British markets and centers of innovation, brings investors within reach, and fulfills "Make in India" aspirations.

Protection for Agri & Sensitive Industries: Exemption is provided to dairy, rice, sugar, and core agri products, so that India's rural economy is not adversely impacted.

Professionals Gain: Indian employees in the UK will not have to pay social security for 3 years, retain their provident fund corpus and become more competitive.

Simplified Visas: Simplified processes for Indian chefs, yoga instructors, musicians, engineers, and IT workers visiting the UK, with simplified skill accreditation and entry requirements.

Reduced UK Imports: Tariffs on British cars, whiskies, cosmetics, chocolates, and others will be lowered for Indian consumers.

Inclusive Growth: The accord is designed to facilitate women entrepreneurs, fishers, youth, and community MSMEs to foster gender-balanced and inclusive prosperity.

Source: Economic Times, Times of India, The Tribune, TICE News, and Hindustan Times, July 24, 2025.

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