The recently concluded India-United Kingdom Free Trade Agreement (FTA) is poised to deliver significant gains for Indian businesses across sectors, with benefits expected to reach not just large corporations but also micro, small and medium enterprises (MSMEs), according to an industry body. The assessment was shared in Mumbai on 20 July.

A Historic Step for Indian Exports

Indian Merchants' Chamber (IMC) President Prof. Mahendra Kumar Chouhan described the agreement as a 'historic step' that would strengthen India's export ecosystem. He said the FTA is expected to democratise exports by enabling businesses of different sizes and industries to tap the UK market, making export growth more inclusive than previous trade arrangements.

According to Chouhan, the benefits will not be confined to large companies. Medium-sized firms and MSMEs stand to gain meaningfully, with improved access to the UK helping them expand their global footprint in a structured, sustainable manner.

Sectors Positioned to Gain the Most

Chouhan highlighted several industries likely to benefit significantly under the agreement. These include textiles and apparel, gems and jewellery, leather and leather goods, information technology, professional services, and other labour-intensive sectors.

He noted that India's globally recognised expertise in diamond cutting and polishing gives the country a strong competitive edge in gems and jewellery. Similarly, India's skilled workforce in information technology, fintech, financial services, and software engineering is well-positioned to deepen its presence in international markets through improved UK access.

This comes amid a broader push by Indian industry to move up the value chain — from low-cost manufacturing to higher-margin services and technology exports. The FTA, if implemented effectively, could accelerate that shift by providing preferential access to one of Europe's largest high-income consumer markets.

Cost Efficiency Meets High-Income Market Access

Chouhan argued that India's cost-efficient production, when combined with access to the United Kingdom's high-income consumer base, would enable domestic companies to achieve better value realisation for their products and services. This combination, he said, could enhance their overall global competitiveness — particularly for sectors where Indian labour costs remain a structural advantage.

Notably, the India-UK FTA has been years in the making, with negotiations spanning multiple rounds since 2022. Its conclusion is seen by industry observers as a significant diplomatic and commercial milestone for both nations.

India's Indigenous Innovation in Focus

Chouhan also used the occasion to spotlight India's growing technological self-reliance, citing aerospace startup Skyroot Aerospace as an example of indigenous innovation. He said the company's success in developing advanced rocket technology reflects India's increasing emphasis on research, domestic technology development, and homegrown engineering talent.

He added that the achievement of a young team of engineers and entrepreneurs demonstrates the depth of India's talent pool, and should encourage more industries to invest in locally developed components and technologies — a theme increasingly central to India's industrial policy.

What Comes Next

Industry bodies are now expected to work with the government on sector-specific implementation guidelines under the FTA. For MSMEs in particular, the focus will be on awareness, export readiness, and logistics support to ensure they can effectively leverage the new trade lanes. The agreement's full impact will depend on how swiftly the operational framework is put in place on both sides.