Introduction
If you are a trader in India with Motilal Oswal, the new UK-India Free Trade Agreement (FTA) is an opportunity to leverage the changes to the trade universe and scan the playing field for new market plants. As a trader, the flagship UK-India FTA is an opportunity to generate solid returns in textiles, pharmaceuticals, and jewellery. Let's explain how the India-UK trade deal alters your trading and shows a turning point in global trade or a slant in your favour.
What is the India-UK FTA?
The FTA offers a transformative trade agreement that vastly reduces tariffs and barriers and aims to boost trade between India and the UK to $120 billion by 2030. If finalised, the India-UK FTA is expected to cut or reduce tariffs on a significant proportion of goods traded between the two nations. While reports indicated optimistic targets were being targeted, the specific achievements (for example, 99% of exports are duty-free), and whether all duty-free are a bit vague and still being negotiated by the two parties. The FTA between the UK and India is the largest free trade agreement between a developed and developing economy, and the UK's largest post-Brexit trade deal, making it a strategic win for both countries.
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Why does this FTA matter to you?
The India-UK FTA is about more than the movement of products. It is about enhancing your ability to trade better. The FTA means cheaper exports of textiles, leather, jewellery, and pharma products to the UK for Indian traders, which is set to explode in demand for the above sectoral stocks. The FTA also pertains to projects and businesses of Indian origin, so you must capitalise on the rise of global demand and trade, as we have already seen companies like Arvind Textiles or Cipla significantly benefiting from this rise. Finally, the FTA opens markets in the UK with four products: marine products and engineering goods, providing Indian traders with better regulations, faster approval on exports, and potentially higher profits because of the better regulatory environment. Finally, better regulatory environments or diplomas will see special categories of visas for Indian chefs, yoga instructors, and artists, resulting in a more mobile workforce and potentially higher remittance inflows to India.
Tariff cuts from 150% to 75% on whisky. For electric vehicles, tariff cuts from 125% to 0% (10% quota) also mean they are cheaper in India. Providing an FTA between developed and developing economies establishes a precedent for international trade that can only offer one avenue of positive implications for business.
This also allows you to invest in UK-domiciled ETFs or Indian companies that are suppliers and partners with UK brands. The India-UK deal presents a vehicle where it is easier to invest with relaxed rules for UK companies to enter India's luxury and healthcare sectors, and you can monitor them for portfolio asset diversification.
Key Takeaways for Indian Traders
Export-Driven Double-Digits: Zero duty access for 99% of India's exports can only help sector-based picks like textiles, chemicals, or pharmaceuticals.
Clear Trading: Motilal Oswal's trading platform allows for real-time stock screening, real-time margin tracking, and margin alignment based on free trade results.
Opportunity for Investments: Use your investments in firms partnered with the UK, where India benefits from fintech, clean energy, or manufacturing.
Retirement / Social Security Trading: More than 75,000 Indian professionals or 2.8 million avoid double contributions to the UK retirement system.
Control Market Safety: Trade under SEBI, India's trading oversight.
Is this FTA suitable for your execution? The India-UK Free Trade Agreement is an absolute treasure if you are fully aware of market conditions.
Conclusion
The India-UK Free Trade Agreement is your gateway to markets around the world, connecting Indian exports to UK consumers and British innovations to India's growth. Use Motilal Oswal's state-of-the-art platform and take advantage of what you can gain from this trade agreement to grow your portfolio. It could be anything from textiles to tech. Trade with smarts, remain disciplined, and allow the free trade revolution to build your wealth.
Also read: India to become world’s 3rd largest economy by 2030: SECI Summit 2025 | A beginner’s guide to Global investing