After three years of negotiations, the UK and India have finally struck a landmark trade agreement.
For UK businesses already operating in India, or eyeing the market, this is very welcome news.
The deal is being described as the most economically significant bilateral agreement the UK has signed since Brexit, with the potential to increase trade between the two countries by £25.5 billion a year by 2040.
While headlines have focused on whisky and luxury cars, the real opportunity lies in the detail, particularly for UK business owners expanding across borders.
Lower tariffs, higher potential
The deal will see tariffs reduced or removed on a wide range of UK exports, including:
- Whisky and gin
- Aerospace parts and medical devices
- Cosmetics
- Lamb, salmon, chocolate and biscuits
- Higher-value cars
At the same time, Indian goods entering the UK, from clothing and jewellery to frozen seafood, will become more affordable, potentially boosting consumer choice and supply chain diversity.
For businesses trading across both markets, this can help with access, competitiveness, and planning with a clearer view of future costs.
A win for services and staff mobility
One of the less talked about but highly valuable parts of the deal is the new provision on social security contributions.
Under the agreement, employees temporarily transferred between the two countries will be exempt from double contributions, meaning they (and their employers) only pay into the home country’s system.
This reduces the cost of cross-border secondments and makes it easier for companies to deploy talent where it’s needed most, without unnecessary red tape or financial penalties.
The deal also opens up new opportunities for British firms to bid for public procurement contracts in India, a significant step, especially in sectors like infrastructure, consulting and engineering.
What happens next?
Although the deal has been signed, it will take time, potentially up to a year, to come into full effect. That means you should now review your position, assess your current and potential exposure to Indian markets, and consider how the deal could help shape your long-term strategy.
At the same time, the Government has just announced a new trade agreement with the US, offering fresh benefits for manufacturers, exporters and the steel industry in particular.
It’s further evidence that global trade is changing, and that UK businesses need to stay alert to both the risks and the opportunities these changes bring.
We work closely with businesses navigating international growth, and can support you in building a plan that is compliant and commercially sound.
If you would like to discuss how the UK–India trade deal could affect your business, get in touch today.
Reanda UK is a subsidiary of leading independent accountancy firm Grunberg. Our aim is to help businesses and individuals to navigate the UK’s world-renowned business and tax infrastructure, and to support them with their international ambitions. To find out how we can help you, please contact us.