India-uk trade deal 2025; what are the implications?

The India-UK Trade Deal, signed in July 2025, has emerged as one of the most significant bilateral agreements for the UK since leaving the EU. It brings with it tangible opportunities but also regulatory changes that directly affect British businesses exploring expansion or investment in India, as well as those connected to global supply chains. 

Unpacking the India-UK Trade Agreement 

This landmark Free Trade Agreement between the UK and India will slash tariffs on 90% of British products exported to India and, reciprocally, eliminate tariffs on 99% of Indian tariff lines, opening markets on a much bigger scale. For UK exporters, key product categories like whiskey, automotive machinery, electrical goods, medical devices, and various food items will see tariffs drop dramatically. Whiskey tariffs, for example, will fall from 150% to 75%, eventually dropping as low as 40% within a decade. Automotive tariffs, historically over 100%, will be cut to 10%, clearing the path for British manufacturers seeking entry into India’s growing automotive and engineering sectors. 

Real-World Implications for British Businesses 

This agreement is expected to increase UK-India bilateral trade as much as £25.5 billion each year, building on the already robust £43 billion trade value seen in the previous year. For British companies, these changes do more than lower costs, they streamline customs processes, with both governments pledging to release goods from customs within 48 hours provided all documentation and regulatory requirements are satisfied. The simplified procedures are designed to make British exports to India faster and far more predictable, removing any complications which may have existed in the past.  

Indian customs themselves are evolving, with ongoing Goods and Services Tax (GST) reforms, as well as pro-business regulatory tweaks that simplify trade and encourage strategic supply chain connections. India is positioning itself as a manufacturing and distribution hub for multinationals, not just a consumer market. For British businesses, this means easier integration into the broader Asian supply chain while also keeping compliance risks in check. 

The trade agreement also sets up fertile ground for the growth of several UK sectors in India: 

• Energy & Clean Technology: BP and Shell are investing heavily in renewable energies and EV infrastructure. 

• Retail & Food: Marks & Spencer, Tesco, and premium food producers benefit from reduced tariffs and a more receptive consumer base. 

• Aerospace & Engineering: Rolls-Royce, BAE Systems, and others stand to gain from diminished import duties and stronger manufacturing links to India. 

• Higher Education: UK universities are increasingly pursuing partnerships and campus expansions, thanks to new Indian regulations permitting foreign institutions to set up local campuses. 

These opportunities translate into projected job creation for both nations, with 2,200 new jobs expected in the UK, especially in aerospace, technology, and advanced manufacturing. 

Indian Regulations: What to Watch 

Customs and regulatory processes in India have been modernizing rapidly. While there are still some complexities, recent changes such as the reforms (mentioned above) to GST have streamlined taxation. The government is committed to expedited customs clearance, though achieving this requires rigid compliance with evolving import-export documentation, valuation, licensing, and product standards. For British exporters, aligning trade practices with India’s regulatory regime is vital, and support from customs professionals is more important than ever. 

India’s regulatory bodies now emphasize: 

• Efficient paperwork and electronic filing.  

• Accelerated customs clearance.  

• Clear rules for cross-border taxation.  

• Greater openness to foreign investment, particularly in strategic sectors like education and manufacturing.  

The Deal’s Strategic Context 

India is now the world’s fourth-largest economy and is expected to be the third-largest global importer by 2050, offering a vast and growing market. The UK views India as more than a trading partner. This deal marks a shift toward long-term growth collaboration. For British businesses, the timing couldn’t be better; as global trade tensions rise elsewhere, the UK-India corridor offers stability, transparency, and mutual ambition. 

What should British businesses know when trying to navigate this new deal 

• Early Preparation: Get documentation and compliance practices in order as quickly as possible, as the deal is set to roll out by early 2026.   

  
  

• Customs Planning: Take advantage of faster clearance by partnering with experienced customs experts familiar with both UK and Indian regulatory demands. 

• Sector Focus: Identify the most promising sectors for your products. From food and drink, engineering, textiles, to energy and more.  

This trade agreement delivers more than just tariff cuts; it ushers in a new era of growth between the UK and India. The deal represents both opportunity and a call to proactive engagement. By understanding the regulatory landscape and leveraging sector-specific chances for expansion, British businesses of all sizes can secure their place in what is set to become a pivotal market in the coming decades.