British exporters have been told they will have a “significant competitive advantage” in the rapidly expanding Indian market due to the UK’s upcoming free trade agreement (FTA) with the country.
The head of FTA utilisation at the Department for Business and Trade (DBT), David Johnstone, said that the deal is “expected to increase trade between the UK and India by over £25bn by 2040”.
“That's a really, really significant uplift,” he said on yesterday’s (10 March) Global Trade Live webinar, hosted by the Chartered Institute of Export & International Trade.
“The agreement's going to cut tariffs on UK exports to India by £400m on day one, and that's going to rise to £900m by year 10, as other tariffs are phased down over time.”
Looking beyond the ‘headlines’
Johnstone added that traders should look beyond the “headlines”, noting that while the tariff reductions in the deal have gained a lot of attention, the agreement will create opportunities for a significant range of businesses.
“There’s a whole series of tariff lines where there are reductions. Some of them get the headlines – the big ones of 150% down to 75% - and these are great, we’re really supportive of them.
“But they can also distract sometimes from some of the other tariff reductions we’re seeing of 10%, 20%, 30%, all of which are really significant”.
He said that these reductions present a “significant competitive advantage” for UK businesses in comparison to “counterparts in other parts of the world”.
Oceania impact
To accentuate the possible impact of the India deal, Johnstone noted that smaller tariff reductions seen in the UK FTAs with Australia and New Zealand have already made an impact.
“Even a 5% [reduction] is great for a business to engage with and can make a real difference to profitability and price competitiveness in a market,” he said.
He noted DBT analysis that found that, since the FTAs entered into force with Australia and New Zealand in 2023, total trade had increased with each country by 14% and 19.7% respectively.
“Overall, we're trading much more with those countries than we were before the FTAs… there’s [more] trade intensity, more collaboration [and] more integration between our economies.”
He added that, while it was too early to say if the UK’s membership in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) was having a tangible impact yet, there were positive signs, including a 37% increase in exports to Chile in 2025.
Made exporting ‘a lot easier’
Village Bakery Wrexham may have been one of the first businesses to use the Australia and New Zealand FTAs.
The business’ commercial controller, Glen Marriot, also appearing on yesterday’s Global Trade Live, said that the trade facilitation provisions in the agreements had been particularly helpful. Having previously exported from New Zealand into Australia in a previous role, he said he was a little “nervous” about some the documentation requirements for exporting to these countries from Britain.
But the FTAs have “made doing business out there a lot easier” and the company has been exporting to both countries for “well over two years without any issues whatsoever”.
Support is available
Marriot and Johnstone were also joined by the Chartered Institute’s UK public affairs lead Grace Thompson, who urged companies to make the most of the support being provided to help companies benefit from the UK’s FTAs.
Thompson acknowledged that many businesses appeared daunted by the perceived complexity of the rules they need to comply with to benefit from preferential tariffs within FTAs, but said this needn’t be a burden.
“Businesses certainly need to be aware that to claim preferential tariff rates, they need to comply with rules of origin and other requirements within the FTAs,” she said.
“For complex international supply chains, where you might be manufacturing goods using different parts or ingredients from different countries, this can be more complex and challenging. Businesses may even have to adjust how they assemble or manufacture their goods in order to comply with these rules.
“But this shouldn't put anyone off. There is support available to businesses to ensure that they can understand and navigate FTA compliance requirements. There’s support from DBT of course, and from organisations like us.
“We run a rules of origin training course where you can learn about the intricacies of the criteria for proving that your goods are of UK origin if exporting to an FTA partner and what evidence you also need to provide in order to support this; or if you're importing, you can learn about how to work with your supply chain partners to ensure that you can get the evidence needed to claim preferential origin on goods entering the UK.”
India preferential tariff portal
One key step Johnstone urged businesses to take, even if they’re not immediately considering beginning trade with India, was to sign up to a new HMRC authentication portal in order to be able to claim preferential tariff rates.
“This isn’t a provision in the Australia, New Zealand ones or CPTPP, but for India… you essentially have to sign up to HMRC’s authentication portal,” he said.
“We’ve tried to keep it very light touch, but it is mandatory and that’s the point we want to get across. There is no way to get your tariff reductions under the India FTA that doesn’t involve you registering for this portal.”
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