India and the United Kingdom have finalized a historic free trade agreement (FTA) after three years and 14 rounds of negotiations. The deal is expected to significantly enhance bilateral trade, taking it to an estimated $120 billion by 2030. It marks a major milestone in India’s post-Brexit global trade strategy and is poised to unlock new opportunities across multiple sectors.
According to official announcements, the FTA will eliminate tariffs on nearly 99% of the tariff lines, providing comprehensive market access for Indian goods and services in the UK market. The agreement is positioned to catalyze trade, investment, job creation, and economic growth for both countries.
Sector-Wise Gains and Stocks in Focus
Several key industries stand to benefit substantially from the new trade framework:
Auto Sector: Indian tariffs on automotive imports will drop from over 100% to 10%, complemented by quotas for auto imports. This move is likely to make premium UK vehicles more accessible to Indian consumers, benefiting companies like Tata Motors, Eicher Motors, TVS Motors, Endurance Technologies, Sundram Fasteners, and Motherson Sumi Systems.
IT Services: The FTA will facilitate easier mobility for Indian IT professionals and improved access for firms. Industry leaders such as TCS, Infosys, HCL Tech, Tech Mahindra, and Wipro are expected to see significant advantages.
Pharmaceuticals: Eased regulatory approvals for generic drugs are set to boost Indian pharma exports, with companies like Dr. Reddy’s Laboratories, Cipla, Lupin, and Sun Pharma well-positioned to benefit.
Industrial and Engineering Goods: The pact is expected to drive demand for Indian suppliers in the UK’s infrastructure and manufacturing sectors, favoring players like Cummins India, Thermax, L&T, and ABB India.
Alcobev Sector: Import duties on Scotch whisky and British gin will be halved, improving market dynamics for companies such as United Spirits, Radico Khaitan, and Allied Blenders.
Textiles: Indian textiles will gain improved competitiveness in the UK with zero tariffs, boosting companies like Vardhaman Textiles, Welspun India, Gokaldas Exports, Raymond, and Page Industries.
Agriculture and Food Products: Tariff concessions for Indian tea, spices, and ready-to-eat products will improve market access, helping companies like Tata Consumer Products, Nestle India, Hindustan Foods, KRBL, and LT Foods.
Gems and Jewellery: Exports of Indian gems and jewellery to the UK are projected to double, with companies like Titan Company, Kalyan Jewellers, and Rajesh Exports expected to gain significantly.
Also read: India, Italy Eye $30 Billion Trade Future
Deepening Bilateral Trade Relations
The Ministry of Commerce and Industry described the FTA as a comprehensive and forward-looking agreement designed to deepen ties across goods, services, and technology sectors. It aims to promote sustainable growth, enhance resilient supply chains, and generate high-quality employment in India.
With labour- and technology-intensive sectors expected to gain the most, the India-UK FTA is seen as a critical pillar in India’s ambition to expand its footprint in global premium markets.
