“This is a landmark agreement made by our Prime Minister as well as the Prime Minister of the UK,” said Anant Goenka, Senior Vice President of FICCI and Vice Chairman of RPG Group. “Job-creating sectors such as apparel have been focused on, which will help with employment within India,” he added.
A key highlight of the deal is zero duty access to the UK market for many Indian goods, particularly from labour- and employment-intensive sectors. “There are a lot of competitive advantages coming to apparel, auto and auto components, footwear and parts, carpets, and marine products,” said Sandip Somany, Former FICCI President and CMD of Somany Impresa Group. He emphasised that this would allow India to compete more effectively against countries like Pakistan, Bangladesh, Vietnam, and China.Indian auto component exports will be a major beneficiary, with duties dropping from around 8.2% to zero. However, tyres will see no change, as their UK import duty already stands at zero. “For auto components, it has gone down… I’m sure non-tyre auto components will see an uptick in sales to the UK,” Goenka said.
Processed and packaged foods also stand to gain, with tariffs reduced on nearly 95–99% of agricultural tariff lines. “The bulk of our agricultural goods can now be exported at zero duty, which will help our farmers penetrate the market better,” Somany said. However, sensitive items like dairy, wheat, rice, and apples remain protected.
The agreement also enhances mobility for Indian professionals, particularly in IT and consulting. “There’s going to be a three-year term,” said Anish Shah, MD and Group CEO of Mahindra Group. “It will be a huge step forward in facilitating movement, encouraging innovation, and fostering a closer tech partnership.”
Shah called the FTA a “fantastic step forward” and praised the effort by India’s Commerce Ministry. “It facilitates exports, encourages innovation, and overall, it’s a win-win that positions us extremely well,” he said. The Mahindra Group sees opportunity across segments—from automobiles to IT services and even hospitality.
On the UK’s ask for market access in financial services, Somany noted: “Many of these companies will now be treated at par with Indian companies. That’s a big win for UK firms and will open up the financial services sector to UK investments.”
Amid global tariff hikes and trade disputes, the India-UK FTA is being seen as a landmark deal—not just for its content, but for the signal it sends. “It’s great timing that we are working on various FTAs with many more countries,” Goenka said.
Below is the excerpt of the discussion.
Q: To what extent does this FTA boost Indian industry’s demand globally, and how do we see trade barriers being reduced by both sides?
Goenka: I think this is a landmark agreement made by our Prime Minister as well as the Prime Minister of the UK. At a time when tariffs are being raised, it is great timing that we are working on various FTAs with many more countries. I think the big benefit to India is increased exports and a competitive edge over countries like Bangladesh and China, helping us increase our share in business in the UK.
I’d also say that job-creating sectors such as apparel have been focused on, which will help with employment within India. Then you have areas such as ease of doing business, digital trade, and increased competitiveness of the Indian labour movement to these countries. To that extent, it’s extremely comprehensive and puts India in a very strong position.
Q: Sandeep Somany, how do you expect businesses like yours to benefit? There’s a lot of emphasis from the Indian government on how labour-intensive sectors are going to benefit and get greater access—zero duty access—in the UK market.
Somany: It’s quite a comprehensive agreement, if you’ve gone through it. I think the Government of India, in this round of the FTA compared to earlier FTAs, which did not benefit the industry, has done well. Industry has been part and parcel of the discussions this time—invited by the government to give its inputs. I think it’s a very comprehensive agreement that has been signed.
If you look at labour and employment-centric industries, there are a lot of competitive advantages coming to apparel, auto and auto components, footwear and parts, carpets, and marine products which will benefit our fishermen and marine preparations, adding value to our exports. Many of these areas employ a significant amount of labour, and these will all become zero duty.
As Anant said, this will also help India become much more competitive versus our neighbouring countries like Pakistan and Bangladesh, which already get 0% duty, and also against competitors like Vietnam and China. So, I think this is quite a historic agreement and will benefit Indian exports significantly.
Q: The UK today announced investments by UK companies in India and at least seven or eight Indian companies will be making investments in the UK—does this FTA encourage the RPG Group to increase its footprint in the UK?
Goenka: We’ve already been committed to the UK in different ways. We sell a fair amount of tyres there. We also invested in a tech company called Foolproof through Zensar Technologies, and this was possibly the first investment we made the day after Brexit. So even during uncertain times, the RPG Group has been invested in the UK. I think it’s too soon—just after the FTA—to look at further investments, but certainly, life will get easier. There will be social security benefits for IT service professionals. To that extent, life becomes easier. We can send more people there, and I think we will evaluate and continue to look at opportunities in the UK.
Q: The UK government has said that India will reduce tariffs from 110% to 10% on the automobile sector through quotas. Could you give us a sense of the tyre industry or auto components? What kind of market access do you now get in the UK, and what access must India give to the UK’s automotive industry?
Goenka: For the tyre sector, there’s not much change. The duty for tyres going into the UK is already at zero and will continue at the current rate. For auto components, it has gone down—it was about 8.2%, and this will go down to about 0%. So, I’m sure non-tyre auto components will see an uptick in sales to the UK. As I said, for tyres, not much change.Q: Sandeep Somany, do you expect more investments from UK financial services and insurance companies, considering that was a major ask? They were looking for certainty and binding clauses in the FTA. Will this now be a tipping point?
Somany: I think so. The Indian market is huge for financial services, and as part of the deal, many of these companies will now be treated at par with Indian companies. That’s a big win for the UK companies, who had been asking for this for a long time, and it will open up the financial services sector to UK investments. So that’s a good move.
Q: I believe you were there, witnessing this historic agreement. Could you share some takeaways and how the Mahindra Group will benefit?
Shah: I’m actually at Chequers, the UK Prime Minister’s residence. We were just with both Prime Ministers. What I will say is that this is a fantastic step forward for India. The warmth of the relationship is amazing. Both Prime Ministers talked a lot about what we’ll do together as countries, and that solidifies India’s standing in the world.
From a trade deal-specific perspective, I think it’s very well outlined. I’d give tremendous credit to the Commerce Ministry, the Ministry of External Affairs, and everyone who’s been working on this for a long time. From the details I’ve seen, it’s positioned India very well. It will encourage manufacturing in India, making India a manufacturing hub. It facilitates exports, encourages innovation, and overall, it’s a win-win that positions us extremely well.
Q: I’d like to ask you about automotive tariffs. The UK Prime Minister’s office says Indian tariffs will reduce from 110% to 10% through quotas. Is this across the board or only for electric or luxury vehicles?
Shah: I’ll leave the government to speak on the specifics of what’s been signed. From what I understand, the details have been worked out in a way that strengthens the auto industry in India and is a win for both countries.
Q: Do you feel that the Indian auto industry is ready for competition from UK car makers? Has this been done with local interests in mind?
Shah: I’d flip the question—Is the UK car industry ready for the challenge we’ll pose by sending cars from India?
Q: But do you also believe these concessions apply only to electric vehicles?
Shah: Again, I’ll leave the details to the government. All I will say is that from what we’ve seen, it has been put together really well.
Q: How does this agreement help the movement of professionals, especially in IT, consultancy, and emerging technologies, between India and the UK?
Shah: It will help tremendously. As I understand, there’s going to be a three-year term. I don’t have all the details yet, but in brief discussions with some key leaders here, we feel it will be a huge step forward in facilitating that movement, encouraging innovation, and fostering a closer tech partnership between the two countries.
Q: Within the Mahindra Group’s diverse businesses, which areas do you believe will get an immediate boost and encourage you to increase your UK footprint?
Shah: I’d say a number of areas. Automobiles, certainly. IT services will get a boost as well. We’ll look closely at hospitality to see if there’s potential there, and there are a few other areas we’ll evaluate once we have more details.
Q: From the Indian side, it appears that automobile tariffs in the UK have been reduced to zero. So, what would be the duty structure on Indian car exports to the UK?
Shah: I won’t go into the duty structure. I think we’re very well positioned, and we look forward to competing in the UK.
Q: This FTA may now serve as a template for negotiations with the US and the EU. Do you expect similarity and alignment in other trade deals?
Shah: I think the challenges for each country are different, and their demands will differ. While this may be a template, I expect some meaningful differences in other trade deals.
Q: Mr. Somany, on agricultural exports—this FTA reduces tariffs on nearly 95–99% of agricultural tariff lines. Our processed foods, pickles, beverages, and some wines will get access to the UK market. But we’ve protected farmer interests by not compromising on dairy, wheat, rice, maize, apples, and oats. How will this benefit India’s farm exports in the long run?
Somany: I think we’ll get better access to their markets, which are primarily fed by other countries. India’s share in UK imports is only 1.88%—not just for agriculture but overall. So, this will help us enter their food chain better, especially through processed foods and large food retailers. Very few items have been kept out. The bulk of our agricultural goods can now be exported at zero duty, which will help our farmers penetrate the market better.
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