India-UK FTA To Boost Exports, Remittances And Trade Ties: S&P Global
The recently finalised Free Trade Agreement (FTA) between India and the United Kingdom is expected to deliver substantial economic benefits, including a surge in Indian exports, enhanced worker mobility, and a boost in remittances, according to a report by S&P Global Market Intelligence.
In 2024, Indian workers abroad sent home approximately US$ 130 billion, accounting for 3.3 per cent of India’s GDP. The United Kingdom ranks as the third-largest source of these remittances, after the United States and the United Arab Emirates. Under the new trade deal, Indian ICT professionals posted in the UK will be exempted from national insurance contributions for up to three years, a move that could increase disposable income and remittances back to India.
The FTA aims to double bilateral trade in goods and services between the two nations to over US$ 100 billion by 2030, up from US$ 56.7 billion in 2024. Indian exports particularly textiles and apparel, which have been facing headwinds in the US market are expected to benefit from improved market access in the UK.
For Britain, the agreement offers expanded access to India’s growing consumer base. While the overall benefits for the UK economy are expected to materialise gradually, the beverage sector is set to gain immediately, with tariffs slashed on 97% of whisky and gin exports. However, the deal excludes pharmaceutical exports, limiting some of the economic gains for the UK. There is also a lack of clarity around how UK car exports will be managed under India’s quota system.
The India-UK agreement is part of India’s broader strategy to forge stronger trade links with key global markets. In 2025 and 2026, New Delhi aims to finalise similar agreements with the Gulf Cooperation Council (GCC) countries, Australia, Japan, Southeast Asian nations, and countries in Latin America.
The swift conclusion of the India-UK FTA also marks a significant development for the United Kingdom, which continues to redefine its trade partnerships post-Brexit.
According to S&P Global, the deal is expected to not only reinforce economic ties between the two countries but also enhance India’s position in the global trade ecosystem.
