The India–UK Free Trade Agreement (FTA)comes into force on 15 July 2026, marking a major milestone in strengthening trade and investment between the two countries. The agreement is expected to boost bilateral trade by £25.5 billion annually, creating significant opportunities for businesses, investors, and professionals operating in both markets.
Whether you trade goods, provide professional services, or are considering expanding into the UK or India, the FTA offers reduced costs, easier market access, and improved business mobility.
Key Highlights
Reduced Tariffs on Goods
The FTA significantly reduces or eliminates customs duties on thousands of products.
For UK exports to India:
| Product | Current Tariff | New Tariff |
|---|---|---|
| Scotch Whisky | 150% | 75% immediately, reducing to 40% over 10 years |
| Premium Cars | 110% | 10% over 5 years (subject to quota) |
| Electric Vehicles | Up to 110% | Duty-free from Year 6 (eligible categories) |
| Cosmetics & Medical Devices | Various | Phased tariff reductions |
For Indian exports to the UK:
- 99% of Indian goods will receive duty-free access to the UK market.
- Tariffs removed on:
- Processed Foods – up to 70%
- Marine Products – up to 21.5%
- Engineering Goods & Auto Components – up to 18%
- Leather & Footwear – up to 16%
- Textiles & Clothing – up to 12%
- Chemicals & Pharmaceuticals – up to 8%
These reductions are expected to lower import costs, improve competitiveness, and encourage increased cross-border trade.
Greater Market Access
The agreement opens up new opportunities across sectors including:
- Financial Services
- Accountancy & Professional Services
- Information Technology
- Manufacturing
- Pharmaceuticals
- Engineering
- Education
- Healthcare
- Digital Trade
Businesses will benefit from a more transparent and predictable trading environment.
Double Contribution Convention (DCC)
Alongside the FTA, the Double Contribution Convention (DCC) also comes into effect on 15 July 2026.
Under the DCC:
- Eligible employees on temporary assignments will contribute to only their home country’s social security system, avoiding double contributions.
- The exemption is available for up to five years, reducing payroll costs and simplifying cross-border employment for businesses.
Buying a UK Business from India
The UK remains one of the most attractive destinations for Indian investors seeking international expansion.
The FTA strengthens investment confidence by providing:
- A stable legal and regulatory environment.
- Easier access to UK and international markets.
- Greater certainty for long-term business investments.
- Enhanced opportunities across technology, manufacturing, retail, healthcare, and professional services.
Before acquiring a UK business, investors should undertake financial, tax, and legal due diligence to ensure the acquisition is structured efficiently and complies with UK regulations.
What Should Businesses Do Now?
With the agreement taking effect on 15 July 2026, businesses should:
- Review import and export tariff classifications.
- Assess eligibility under the new tariff schedules.
- Evaluate payroll arrangements under the Double Contribution Convention.
- Review tax structures and corporate compliance.
- Explore opportunities for expansion, investment, or acquisitions in the UK or India.
How We Can Help
Our experienced team can assist with:
- UK company incorporation and business setup.
- Business acquisition advisory and due diligence.
- Cross-border tax planning and structuring.
- Payroll and employment compliance.
- Accounting, statutory compliance, and ongoing advisory services.
Looking Ahead
The India–UK Free Trade Agreement is more than a trade deal—it is a strategic partnership that creates long-term opportunities for businesses in both countries. Early planning will help organisations maximise the benefits of reduced tariffs, simplified compliance, and improved access to one of the world’s fastest-growing trade corridors.
If your business trades with, invests in, or plans to expand into the UK or India, our team is here to help you navigate the opportunities and compliance requirements under the new FTA.
Disclaimer: This newsletter is for general information only and should not be regarded as legal, tax, or financial advice. Professional advice should be sought based on your specific circumstances.
