The deal, which took 14 rounds of negotiations across four UK Prime Ministers and three years to conclude, is expected to more than double bilateral trade to $120 billion over the next five years. The current volume stands at around $56 billion.
Mittal said the agreement will deepen cooperation in key areas like defence, space, and advanced technology. “The UK has deep technologies and India has the scale, talent and low-cost manufacturing. When you combine these complementary benefits, you become a force multiplier,” he said.The FTA also brings significant gains for India’s services sector by easing mobility norms. Indian professionals, including chefs, musicians, teachers and healthcare workers, will find it easier to live and work in the UK. “This actually delivers a significantly higher benefit for India… in the end it’s got to be a win-win,” Mittal said.
On tariffs, the average duty India levies on UK imports will fall from 15% to 3%. Mittal acknowledged concerns from sectors like automobiles and alco-beverages, but said these have been carefully managed. “India very nicely calibrated the impact on the local industry,” he noted.
Indian companies, too, are expected to expand their footprint in the UK — primarily through acquisitions. Mittal cited examples of Indian firms such as TVS, Kama, Nykaa, and Forest Essentials, which are already investing in British businesses to access markets and technology. “You will see most of that coming through the acquisition of some UK companies,” he added.
The deal is also expected to boost collaboration in education. Chandrajit Banerjee, Director General of CII, highlighted that four UK universities have already entered India. “Joint degrees, academia-to-academia partnerships, and new campuses in India — all of this is now possible,” Banerjee said.
With leaders from both sides backing the agreement, the FTA is being seen as a turning point in India-UK relations, one that sets the tone for greater economic and strategic convergence between the two democracies.
Below is the verbatim transcript of the discussion.
Q: It’s taken 14 rounds of negotiations over three years and four British Prime Ministers to finally get the India-UK FTA done. You know you were there when both Prime Ministers were signing this. Take me through that moment to start with.
Mittal: Well, as you rightly said, this is truly a historic moment, and a lot of work has gone on behind the scenes over the years. And you rightly said, it’s gone through multiple Prime Ministers on the UK side, and we had a solid continuity of leadership for 11 years, actually, and the last three years were, in particular, very hectic.
Trade deals are never easy. They’re very difficult. How do you match the aspirations of two countries, their people, their requirements? Businesses have different pulls and pressures. What you want is what they resist, and vice versa. So, to start with, let me say, I must applaud the leadership of both Prime Ministers to finally come together to conclude this historic deal.
This, to my mind, could actually set up a real roadmap for many other such deals with the Western world. And today, you could see in that room in the very intimate setting at Chequers, a tremendous amount of energy between both sides, bonhomie, friendship, you know, sort of exchanging commitments between not only the political leaders but the business community to take the trade, investment, and trade — both in goods and services — to the next level.
Q: Let’s talk about some of the specifics. Now, average tariffs will be reduced from 15% to 3%. Tariffs have, in fact, been removed on 99% of goods and services. But in the immediate term, there are concerns, for instance, on the Indian side: what happens to the Indian automobile sector? What happens to the Indian alco-beverage sector? I mean, those are two sectors that have expressed their concerns. What we have seen as part of this FTA is a kind of phased reduction of tariffs as well as a quota system. So, if you can explain to us where you believe the most opportunities lie, but also whether the vulnerabilities have been addressed.
Mittal: I think you rightly picked up that there will always be concerns whenever such trade deals are signed. Let me start by saying that the British tariff for Indian goods has almost always been very, very low, and India has continually enjoyed low-tariff entry into the UK for its products and services. Now, while granting lower tariffs on multiple areas like scotch and automobiles and some other areas like, soda and soft drinks, etc., I think India very nicely calibrated the impact of that on the local industry. I think each one of these industries that you have named has a tremendous amount of local manufacturing with a very high degree of local content. So, I think the Indian industry need not worry in these areas.
If UK products were to come to India, even with reduced duties, you know that the cost of manufacturing in the UK is extremely high compared to India; transportation, logistics, insurance, a lot of things come added on top of that. So other than a very niche upper-crust market which will want very expensive British products, I don’t think in terms of mass consumption, there should not be any cause for concern.
And on the other side, the opening up of services agreement, which allows Indian chefs, musicians, teachers, nurses to come more freely to the UK, to my mind, actually delivers a significantly higher benefit for India, as in the end, you rightly said, it’s got to be a win-win. You just can’t take all and not give anything. I think it’s been a great balance.
We will during this interview talk about other significant issues of benefit, like cooperation in defence and space and many other things, but on pure supply of goods, which is a trade block, I think the whole trade deal is very nicely balanced. And if I may hasten to add, perhaps more in favour of India.
Q: You addressed the issue of defence, you addressed the issue of aerospace, etc. And these are, of course, areas of mutual interest, as well as perhaps deeper mutual cooperation. Now, in light of this FTA, but also in light of the geopolitical dynamics and the ever-changing geopolitical dynamics, what does this FTA do specifically to deepen collaboration and cooperation in both these areas?
Mittal: First of all, these are two economies of similar size. India, at $3.5 trillion, and the UK about the same size. The UK has advantages in a lot of areas of technology, biosciences, defence, very deep technologies on missile technology, space technologies, and yet they do not have adequate manufacturing facilities or the talent pool that is required to back them off to be world champions. On the other hand, India has a very large market, unlike the UK, which has a much smaller population; it has the talent. It has the low-cost manufacturing facilities. Now imagine if you combine these two complementary benefits that each country can offer to each other, you become a force multiplier. India is poised to be a $25-$30 trillion economy. The UK recognises that, and therefore were very happy to embrace and talk about a deep technology partnership, which usually the Western world has not opened up to emerging economies. So, in that sense, this would be a very special advantage for India to get access to technologies for its own needs, its own markets, but more importantly, exporting across the world.
Currently, the total business between the UK and India is about $56 billion. This agreement has an ambition and a vision to take this to $120 billion in a five-year time frame. And that’s a real strong vision that has been set up by the two prime ministers. And I know that the Indian government, Indian Prime Minister personally himself, and of course, our trade minister, Piyush Goyal, worked on each item of this deal personally to ensure that there was a very important advantage that India gets while opening its market, which the UK will gain by sending, of course, as you rightly said, more products into India.
But I personally feel the bigger advantage will come from UK companies investing in India and creating bases in India, which will have a high talent pool that they can access, low manufacturing cost, and make for the world market. Which I can tell you, having now worked in the UK for several years, is hard for UK companies to come to those levels of competitiveness that India can offer.
Q: You pre-empted my question, because the expectation or the assumption is that with the tariff reduction, will there be incentives for UK companies to consider local manufacturing? You’re saying that, yes, you see that happening. Are there any specific sectors where you believe we will see more of that happening, and do you also foresee more joint ventures between UK companies and Indian companies in light of this?
Mittal: We need to put it in perspective. $36 billion of investments have already been made by British companies in India. From the Indian side, about $20 billion have been invested in the UK in setting up companies. So the UK, in that sense, is already ahead, and now with many of their industry players seeing lower duty structures in India, where you can import stuff at much lower duties than they were previously, it incentivises them to have a bigger presence in India, both for their own goods that they can produce here and sell in India, whatever limited market they could get at the upper crust, but equally, start to manufacture some of those parts, complete products in India, to have a bigger slice of the Indian market. So, if I was a British businessman, and I know that the duties are known now, the country is open for business, we can move people between the two countries in a seamless manner. I think it makes the decision making in the boardrooms much, much stronger in going into India to manufacture and set up larger bases in India.
Q: You were speaking hypothetically from a British businessman’s point of view. Let me ask you to speak realistically from an Indian businessman’s point of view. As you said, you’ve have business interests for several years now in the UK with that sizable investment that you’ve done in BT, specifically from your point of view, between OneWeb and BT, etc. Do you see yourself expanding your own bet on the UK? And do you believe that other business leaders in India, other business houses from India, will consider making similar bets on the UK?
Mittal: I would think so, and you will see most of that coming through acquisition of some UK companies. As I said, technology is very advanced. Markets are small. And we are already seeing companies like TVS, who have picked up the Norton Motorbikes here in the UK, where they are manufacturing very high-end motorbikes. They were on display today. Our companies, which are in the beauty areas, like Kama, Nykaa, Forest Essentials, they’re all making their inroads into the UK markets, trying to acquire companies here to get better technology, better access into the Western markets.
So, I see a much better roadmap for Indian companies to come and invest here. You know that the big unlocking of the monies that were put through the contribution side have been a big problem for Indian companies, where giving the contribution into the UK pool for provident fund and medical, etc., were a waste for Indian individuals when they went back home. Now, the UK has, in this agreement, given a three-year waiver on the double contribution commitment, which means that the Indian employees who are going to be working here will not be required to pay those contributions, saving nearly ₹4,000 crores for the Indian companies. So, Indians can now come, invest here, bring talent, and fire up the local companies, which generally otherwise do not have such large markets or talent pools. So, I would say you will see a lot more Indian companies coming and investing here.
Q: What about your own appetite, to expand your presence in the UK?
Mittal: Well, we are, as you know, taking a big position both in OneWeb and BT. We are looking at more opportunities here in the UK. We also have the hospitality sector where we came some years back. We have a number of marquee hospitality, hotel properties, real estate properties here. So, we are certainly looking at opportunities. And we remain very agile and open for new opportunities.
Q: We were talking about the road ahead as far as both India and the UK are concerned in light of this FTA, but specifically on the services side of the story, with mobility being given a less or more frictionless approach. Now, what do you see as the big opportunity for Indian companies in the services sector?
Banerjee: So, one of the biggest opportunities that we see here would be the mobility for India. You heard Mr. Mittal speaking about the number of Indian companies working in the UK, and which is going to expand, which is going to increase, and we see a much easier movement of many of them from India because the talent pool for the type of companies that are coming into the UK is not very strong in the UK. So that offers a phenomenal opportunity for our people to move in with ease into the UK.
Number two, if you really look at services, there are specific areas where we have opportunities which may not be strictly within industry areas — areas like, say, for instance, chefs, musicians, even yoga practitioners for instance, this will facilitate the inflow of many from those sectors to come and really practice it here.
Education is going to be another very key area where we see some of the great opportunities for working and collaborating together. So, the services sector indeed, besides what Mr. Mittal covered, I think these would be some very, very clear areas where we can see a lot of mobility come, and services was a huge component, especially when movement of people is concerned in the trade agreement.
Q: You know, you brought up education, and that would be another interesting opportunity on both sides. Is there any indication at this point in time that we could see parallel campuses of UK institutions being set up here in India? Do you foresee that as being an eventuality?
Banerjee: So what we are going to see going forward is we have already seen four big universities getting into India, opening up campuses there. And with our new education policy and this trade agreement, we see a lot more collaborations which will come up between our universities, Indian universities, and theirs. Joint degrees is something that could probably come up. And, of course, themselves opening more campuses in India, and also the collaboration between our industry and their academia. So, both academia-to-academia collaboration, the opening of campuses in India, and, of course, Indian industry R&D over here is so strong, there could be a lot of advantages that could be taken through the trade agreement, through academia.
Q: So, in light of the work that’s already been done, but more importantly, the current playbook that exists, where do you see the maximum benefits in the shortest amount of time on both sides?
Mittal: The UK Parliament has to put a stamp of approval in the coming days and weeks. I would say as soon as that is done, this agreement comes into effect. Indian businesses, like all businessmen, are first tuned to make their plans in their minds. And I think with this agreement, everybody will start to sharpen their pencils to see what products they can export to the UK, what benefits they can take, which investments they should make. And I would say, within this financial year itself, you will start to see a trajectory which will be quite steep, demonstrating that we could double the trade in five years, or even less, in services, goods, and importantly, FDI into both countries.
Q: Mr. Mittal, you said that you hope this deal becomes the template for other deals that India is hoping to ink. We were hoping to have a deal with the US. Of course, talks are on. We understand that the sixth round of negotiations will now perhaps happen in August, so that first August deadline — we may or may not have a deal. What’s your take on where we find ourselves in dealing with the US and the possibility of getting that deal done?
Mittal: Well, I think that has also been in the works for the last several weeks. I think probably we will need a little bit more time. The US is a huge market for imports as well as exports; I would say that is an area for the government to negotiate. But let’s see how it works out.
But this UK deal on the back of India-EFTA deal with four countries in Europe, UAE, Saudi Arabia, Australia, I think India is gaining ground. And if the EU deal happens in the coming months, I think barring the US trade deal we would have covered the whole globe.
I remain hopeful that despite some of the inseamers and curveballs that are coming from the US, Indian negotiators will be able to come to a balanced outcome there as well.
Q: Prime Minister Modi today said, India will always bat with a straight bat. In light of the negotiations currently underway with the US, what’s your expectation?
Banerjee: I think India has been pretty transparent about the trade deals that it has been getting into over the last few years, if I may say. And with the US also, there is a lot of consensus among the Indian industry, especially sector-wise, as well as with the government. And I think the Indian industry and the government partnership has helped in terms of coming together on many areas which were not so very clear from the Indian side much earlier. But today, we are clear. I think the other side will have to come to the table. There is still some uncertainty as to how much time it might take. But at the same time, I would think that India is pretty much prepared. The Indian industry is very much prepared to see how we can be fair in this game and work out a win-win solution.
Q: Let me end by asking both of you—and Mr. Mittal, I’ll start by asking you—from the large SME audience perspective in India, they would be examining and assessing this opportunity. What will it mean? Of course, we’ve talked about what it means for big business, but for the large SME base, what potentially could this mean? What could it mean for the agriculture sector, for instance?
Mittal: Let me start with the SME side first. All, those companies which are engaged in manufacturing small auto parts, other machinery parts, hand tools, etc., they are bound to gain from this FTA.
Gems and jewellery in particular, which is in big demand here, is one of the large portions of our trade deal. Most of the artisans working in these areas will get a leg up with the reduced duties, better access to markets. More importantly, being able to send their talented workers here to the UK onsite for some final assembly and finishing, etc.
And not to forget, our leather industry and footwear industry, which are huge employment-generating activities in India, will also get a huge market here in the UK. So, I would say, from an SME point of view—and I’m glad you asked this question because that’s where most of the employment gets generated and economic momentum takes place right at the mid to bottom end—they are bound to gain from this trade deal, because India has much more to benefit from the opening up of the sector meant for SMEs than the other way around.
Q: Your quick take on agriculture as well, because as Mr. Mittal pointed out, labour-intensive sectors hope this opens up a new, bigger market. But on the agri side, there is opportunity as well.
Banerjee: Yes, absolutely. On the agri side, on the food processing side especially, this opens up a lot for Indian small and medium companies. The UK also has strengths in the food and agri, especially the agro-processing, food processing sector. I think there is tremendous scope that comes up.
I want to end with one point: Mr. Mittal is the co-chair of the India-UK CEOs Forum. In the India-UK CEOs Forum, many of the members have been able to travel in this business component, which is being led by Mr. Mittal, we see some critical small and medium sector institutions being included in the CEOs Forum that opens up a huge channel of discussions as we go ahead in implementing the trade deal. So, a lot needs to be done. The implementation has to be done, and the CEOs Forum and other formats of industrialists will really have to take leverage and take advantage.
Q: So Mr. Mittal, let me end by asking you, as the co-chair of the UK-India CEOs Forum, what are the two or three big targets that you’ve set for the forum? And in terms of outcomes, what would you like to achieve, at least in the first financial year?
Mittal: My engagement with my British counterparts is really on the high-end technology sector—whether it’s hypersonic missiles, drones, or UAVs—to transfer those technologies to India, set up their shops in India. India is, through this trade deal, opening up its public procurement sector, to British companies for certain volumes above a certain threshold. That is where now UK companies need to understand what has been done for them and look at Indian opportunities. I will, in the coming weeks, be meeting all the CEOs of the large British enterprises to showcase what they can do in India under this FTA.
