International logistics experts LTS Global Solutions has advised how business can make the most out of the recent UK-India Free Trade Agreement which was finally reached earlier this month following three years of negotiations.
On May 6th, the world’s fifth and sixth largest economies came together in what was described as a ‘historic’ moment for the two nations – concluding on a landmark trade deal which is expected to increase bilateral trade by £25.5 billion and UK GDP by £4.8 billion per year in the long-term.
In 2024, total trade between the UK and India was worth £42.6 billion, with the UK exporting £17.1 billion in goods and services and importing £25.5 billion.
The free trade agreement contains cuts to tariffs which will make it easier for UK businesses to export to India and make imports from India cheaper for UK consumers.
Once the UK-India Free Trade Agreement comes into full effect, which is expected to take around a year, businesses on both sides are poised to benefit from significant tariff reductions and greater market access.
The agreement will eliminate tariffs on 99% of Indian exports to the UK and reduces tariffs on 90% of UK goods exported to India, with most becoming tariff-free within a decade.
This also includes significant cuts on automotive goods, with tariffs reduced from 100% to 10%. Sectors such as the footwear, apparel and textiles, along with food and drink, additionally stand to benefit.
Under the UK-India Free Trade Agreement, the UK will eliminate tariffs on 99% of Indian exports, including footwear, which currently face tariffs ranging from 4% to 16%.
This means Indian footwear imports into the UK are expected to become duty-free, benefiting both exporters and UK consumers.
Conversely, India will reduce tariffs on UK whisky and gin from the current 150% to 75% upon the agreement’s implementation, with a further reduction to 40% by the tenth year of the deal. These reductions aim to enhance market access for UK spirits in India, the world’s largest whisky market by volume.
The deal will also help British companies compete for more service contracts in India.
According to Mirza Baig at LTS Global Solutions, the landmark free trade agreement marks a significant milestone in the UK’s history, opening up new opportunities for businesses across a variety of sectors to expand and strengthen their presence in one of the world’s fastest-growing markets.
He also reminds firms that in order to seize the opportunities available, putting proactive steps in place to ensure a full understanding of the specific tariff reductions and implementing a robust cross border strategy will be critical in the months ahead.
Mirza commented: “Forecasts indicate that India’s GDP is projected to rise from $13.2 trillion in 2040 to $22.2 trillion in 2050, making it one of the world’s most dynamic and fastest-growing economies and as such the removal of tariff and non-tariff barriers under this agreement creates enormous potential for both UK and Indian firms which now have greater freedom to expand their customer bases while also making it easier for them to operate across borders.
“However, to capitalise on these tariffs firms need to prepare accordingly to ensure their goods can move swiftly and efficiently across borders once the agreement takes full effect. The key to unlocking the benefits of this deal lies not just in having great products or services, but in ensuring the right infrastructure is in place to deliver them reliably to customers across India. The same also applies to Indian companies looking to engage in trade with the UK.
“Reduced tariffs also create strategic opportunities for UK firms to reduce their dependence on any one region or country-specific supply chain and keep trade flowing in the event of more US tariff shocks, for instance, or any other socio-economic or geopolitical issues. The new trade deal essentially offers a route for firms to redesign supply chains by tapping into India’s manufacturing strength and growing consumer base, while also diversifying risk.”
The new trade deal comes at a poignant time for LTS Global Solutions which earlier this year opened a regional hub in New Delhi as a part of a wider international expansion strategy.
The company’s regional presence supports its operations across the subcontinent by working with a trusted network of partners. This setup enables LTS to provide seamless logistics and freight forwarding services for both existing and new customers, enabling the seamless movement of goods to or from India back to the UK.
As such, LTS will be well placed to leverage its established UK and Indian networks to provide end-to-end ocean, air, and overland supply-chain solutions with faster clearance and reduced barriers over the coming years, while also guiding businesses through new customs procedures and documentation requirements introduced under the FTA.
Mirza continued: “The UK and India share deep-rooted historical ties and the new UK-India Free Trade Agreement signals a new chapter in this relationship, one which opens up a myriad of opportunities to businesses situated in both nations.
“We’ve long identified the country as a key growth market which is why we’ve taken it upon ourselves to make the decision to invest into a regional hub that puts us in excellent stead to facilitate smoother cross-border operations for customers and build a localised network to help provide tailored logistics solutions for businesses on a global scale.
“Through having this network and infrastructure in place, it’s exciting that we have a real opportunity to help support businesses reap the rewards from this groundbreaking free trade agreement by streamlining the end-to-end logistics process and helping to navigate the changes in the most efficient way possible on their behalf.”
