The news that the UK and India have managed to conclude a comprehensive free trade agreement in today’s trade world may cause incredulity. Yet, surpassing expectations – and several Diwalis – negotiators from the UK and India managed to get both governments to agree a deal on 6 May 2025. So far, both governments and their representatives have announced that a Free Trade Agreement (FTA) has been agreed upon; however, the final text is not yet publicly available. Once the final text is ready, the agreement will be signed and will proceed through the respective ratification procedures. Pending such clarity, we highlight the contours of the FTA and important features that are currently discernible from information published by both governments (the UK and India).
This FTA is not a small (or mini) deal. India, a large, bourgeoning and highly skilled market with an aspirational middle class, has been known to be a tough negotiator bilaterally and multilaterally. The fact that the UK has been able to conclude negotiations with India, including subject areas that are usually not observed in the traditional template of India’s FTAs, is significant in a world that is increasingly fragmented and in which, therefore, trade rulemaking is becoming narrower and sectoral.
" ["align"]=> string(7) "align_l" } ["group_column_2"]=> array(2) { ["text"]=> string(0) "" ["align"]=> string(7) "align_l" } ["_copy"]=> NULL ["group_column_3"]=> array(2) { ["text"]=> string(0) "" ["align"]=> string(7) "align_l" } ["group_core"]=> array(8) { ["layout_label"]=> string(8) "Untitled" ["tog_progress"]=> bool(false) ["tog_header"]=> bool(false) ["tog_padding"]=> bool(true) ["tog_background"]=> bool(false) ["tog_restriction"]=> bool(false) ["grp_lifecycle"]=> array(2) { ["datetime_start"]=> string(0) "" ["datetime_end"]=> string(0) "" } ["grp_identity"]=> array(2) { ["id"]=> string(0) "" ["class"]=> string(0) "" } } ["group_header"]=> array(3) { ["title"]=> string(0) "" ["intro"]=> string(0) "" ["align"]=> string(7) "align_l" } ["group_padding"]=> array(2) { ["top"]=> string(1) "1" ["bottom"]=> string(1) "0" } ["group_background"]=> array(2) { ["group_bg_colour"]=> array(2) { ["bg_colour"]=> string(7) "bg_none" ["bg_colour_pct"]=> int(100) } ["bg_image"]=> string(10) "bgimg_none" } ["group_restriction"]=> array(1) { ["role_access"]=> array(2) { [0]=> string(13) "administrator" [1]=> string(9) "developer" } } } } [1]=> array(2) { ["acf_fc_layout"]=> string(11) "layout_text" ["clone"]=> array(11) { [""]=> NULL ["group_bespoke"]=> array(3) { ["style"]=> string(7) "default" ["column_num"]=> string(1) "1" ["width_2_column"]=> string(8) "split-50" } ["group_column_1"]=> array(2) { ["text"]=> string(8906) "Indeed, the UK–India FTA is comprehensive as it would lead India to remove or reduce tariffs on 90% of its tariff lines, which will cover 92% of existing goods imports from the UK (based on 2022 trade). As soon as the FTA enters into force, 64% of tariff lines will be eligible for tariff-free imports into India, rising to 85% tariff lines after 10 years, with 66% of existing Indian imports from the UK then benefiting from zero tariffs. Whiskey, gin, cosmetics, toiletries, and automobiles (subject to a tariff rate quota) will be the major beneficiaries.
Similarly, the UK will eliminate tariffs on 99% of Indian goods, improving market access for Indian textiles, apparel, footwear, gems and jewellery, and shrimp and benefitting UK consumers. Tariff liberalisation in engineering goods, auto parts and engines and organic chemicals will also be expected to create benefits for the UK manufacturing base. Importantly, sugar, milled rice, pork, chicken, and eggs are kept out of bounds.
Both the UK and India are service-exporting economies, promising greater economic gains through liberalisation. Unusually for the UK as a major services exporter, the UK imports considerably more services from India (£14 billion) than it exports bilaterally (£10 billion). Specifically, India supplies over £9 billion worth of other business services (nearly 9% of total UK services imports) and almost 10% of the UK’s imports of telecom and computer services.1 As such, the UK’s liberalisation of IT/ITeS, financial services, professional services, other business services and educational services, will help attract skilled Indian services, while India’s liberalisation of telecommunications services, environmental services and construction services will likely increase export opportunities for the UK.
In addition, the commitments on government procurement and services, including social security payments, are especially consequential. Alongside the FTA, the UK and India also agreed a Double Contribution Convention (DCC)—an arrangement that the UK has with several other trading partners. The DCC is a reciprocal social security agreement between the parties to allow employees working temporarily in the other country to pay the required social security contributions only in their home country, avoiding double contributions. Importantly, employees are entitled to social security benefits only in the country where contributions are actually made. The exemption is lost if the employee works beyond 3 years, after which contributions must be made in the host country. The DCC is arguably a significant coup for the UK, or a “huge win” as India claims, potentially offered in lieu of deeper commitments on business visas—one of India’s key demands in any FTA negotiation. Moreover, this agreement with India appears to be less comprehensive and applied to a shorter duration compared to similar agreements signed by the UK with Chile, Japan and South Korea.
Also, in a significant development in government procurement, UK firms will gain access to India’s procurement market, covering a wide range of contracts. They will also receive preferential treatment under India’s ‘Make in India’ policy—benefits that were previously limited to businesses manufacturing or producing within India. The obligations in this legal discipline reflect a high level of commitment from India, which has traditionally been hesitant to undertake commitments in government procurement.
Further remarkable features of the FTA appear to be the broad coverage of disciplines—topics that India has traditionally been wary of negotiating. As the UK side proudly notes, this is the first of India’s FTAs to include value-based chapters on anti-corruption, consumer protections, labour rights, the environment, gender equality, and development. Information publicly available at this stage suggests that some chapters will create binding obligations, such as “obligations to maintain a range of measures to prevent and combat bribery and corruption”. At the same time, though, other chapters such as the one on environment appear to avoid binding commitments, focusing instead on cooperative mechanisms on climate technologies, circularity, forests and fisheries, to drive trade liberalisation in environmental goods and services and boost investment opportunities in the green economy. Similarly, on labour, the parties seem to have agreed commitments for upholding international labour protections and for the effective enforcement of labour laws, the bindingness and enforceability of which is uncertain at the moment. Prima facie, these disciplines seem less ambitious than those signed by the UK with New Zealand, which include binding and enforceable disciplines on sustainable development. However, for India, they represent a new approach.
At this juncture, a lot remains unknown. Anything not mentioned by either government in their respective announcements is a question mark in terms of content, structure, and depth of legal obligations. The outlines of chapters and overviews published by the governments leaves the extent of commitments and obligations entered into by parties unknown. For example, more clarity is awaited on the level of commitments taken in specific modes of services trade, before a conclusive assessment can be made of who are the actual beneficiaries in each economy. Further, details of the provisions on data localisation and cross-border data flows; whether there are any provisions at all on taxing electronic transmissions; the application of dispute settlement disciplines to trade and sustainable development chapters, inter alia, remain to be seen. In particular, the implications on cross-border data flows are especially unclear and seem to retain the scope for future negotiations depending on commitments made in the future to third parties. Whether and how this impacts the adequacy decision the UK has in place with the EU will be a matter worth being cautious of. In turn, the precise legal implications arising from the specific terms used in the treaty will bear upon treaty interpretation in the event of any dispute. A case in point is the EU–Korea FTA dispute on labour which revolved around the interpretation of seemingly innocuous wordings such as “commit” and “trade-related”. Thus, specifics will matter in assessing the actual potential for liberalising trade and achieving stated objectives.
Furthermore, amid longstanding tensions over the UK’s proposed Carbon Border Adjustment Mechanism (CBAM), the FTA signals a leap from India in agreeing to a chapter on environment. The chapter on environment neither seems to include comprehensive or binding obligations nor any references to the CBAM. Whether, and how, the UK and India have sought to approach the UK CBAM remains a question of critical importance for Indian businesses. Similarly, another omission from the FTA and its surrounding announcements concerns disciplines on investment. Whether the final text will contain investment-related obligations, or whether it will be accompanied by a separate investment treaty, will be of particular interest to UK investors.
Finally, we do not have a date for the FTA’s signing and consequent ratification. Treaty scrutiny procedures in the UK provide an opportunity to further identify and voice any concerns. Similarly, relevant ratification procedures will need to be completed in New Delhi before the FTA enters into force.
In all, an FTA between two major economies is a ray of hope for the world. In a world in which trade rules and agreements tumble almost every day, creating certainty about market access conditions, and generally about the prevailing rules of the game, may be one of the biggest achievements of this agreement. Setting aside differences, negotiating through turbulent waters, and achieving compromises in a sensible, tactful, and diplomatic manner devoid of economic coercion is still possible, lest we soon forget.
" ["align"]=> string(7) "align_l" } ["group_column_2"]=> array(2) { ["text"]=> string(0) "" ["align"]=> string(7) "align_l" } ["_copy"]=> NULL ["group_column_3"]=> array(2) { ["text"]=> string(0) "" ["align"]=> string(7) "align_l" } ["group_core"]=> array(8) { ["layout_label"]=> string(26) "What is on the table (now)" ["tog_progress"]=> bool(false) ["tog_header"]=> bool(false) ["tog_padding"]=> bool(true) ["tog_background"]=> bool(false) ["tog_restriction"]=> bool(false) ["grp_lifecycle"]=> array(2) { ["datetime_start"]=> string(0) "" ["datetime_end"]=> string(0) "" } ["grp_identity"]=> array(2) { ["id"]=> string(0) "" ["class"]=> string(0) "" } } ["group_header"]=> array(3) { ["title"]=> string(0) "" ["intro"]=> string(0) "" ["align"]=> string(7) "align_l" } ["group_padding"]=> array(2) { ["top"]=> string(1) "1" ["bottom"]=> string(1) "0" } ["group_background"]=> array(2) { ["group_bg_colour"]=> array(2) { ["bg_colour"]=> string(7) "bg_none" ["bg_colour_pct"]=> int(100) } ["bg_image"]=> string(10) "bgimg_none" } ["group_restriction"]=> array(1) { ["role_access"]=> array(2) { [0]=> string(13) "administrator" [1]=> string(9) "developer" } } } } [2]=> array(2) { ["acf_fc_layout"]=> string(11) "layout_text" ["clone"]=> array(11) { [""]=> NULL ["group_bespoke"]=> array(3) { ["style"]=> string(7) "default" ["column_num"]=> string(1) "1" ["width_2_column"]=> string(8) "split-50" } ["group_column_1"]=> array(2) { ["text"]=> string(139) "
