From Local to Global: How the India–UK FTA Empowers Startups

July 25, 2025

Share this post :

Startups, Are You Ready? India and UK Sign Historic FTA

In a landmark move, India and the United Kingdom have signed a long-awaited Free Trade Agreement (FTA), unlocking fresh opportunities for businesses and startups across both nations. The agreement was officially signed by Commerce and Industry Minister Mr. Piyush Goyal and UK’s Secretary of State for Business and Trade Mr. Jonathan Reynolds.

With bilateral trade already standing at USD 56 billion, both countries have set an ambitious goal to double this figure to USD 120 billion by 2030, with further growth targeted by 2040.

According to a statement from the Press Information Bureau (PIB), this FTA reshapes the India–UK trade corridor and opens up new pathways, especially for MSMEs, women-led enterprises, and artisans. Sectors such as textiles, leather, footwear, gems & jewellery, marine products, and toys stand to benefit from duty-free access for 99% of India’s exports to the UK.

This is a strategic win for India, especially as global trade faces uncertainty, with geopolitical shifts like Trump’s potential return stirring future trade anxieties.

What is this FTA doing for the Public?

1. Trade Targets and Tariff Reductions

India will eliminate duties on key export sectors like garments, footwear, and leather. In return, the UK will cut tariffs on items such as whisky, gin, soft drinks, cosmetics, lamb, and farm produce—supporting mutual growth.

2. Auto Sector & Job Implications

India will allow some UK-made cars at just 10% import duty, down from over 100%. While this creates new choices for consumers, it could threaten local manufacturers and jobs in the auto industry.

3. Market Access vs. Visa Gains

UK companies now have easier entry into Indian sectors like telecom, banking, and insurance. They can also bid for Indian government contracts—a major opening. However, India received limited visa concessions in return, a point of debate.

4. IP and Regulatory Shifts

India has agreed to stricter IP rules beyond WTO norms, marking a significant shift in policy. While this may strengthen investor confidence, it could affect access to affordable generic medicines, especially in public health.

Why should Startups look out?

Expanded Access to the UK Market
With 99% of Indian exports receiving duty-free access under the FTA, startups in textiles, leather, footwear, fashion, handicrafts, and wellness products now have a smoother and more cost-effective route into the UK. This significantly reduces entry barriers and allows young companies to scale internationally without high tariff burdens.
Boost in Investment Opportunities
Stronger economic ties between India and the UK will likely encourage UK-based investors, venture capital firms, and institutional funds to explore Indian startups more actively. Sectors like fintech, healthtech, edtech, cleantech, and AI stand to gain from cross-border funding, mentoring, and partnership opportunities.
Increased B2B and Collaboration Potential
As UK firms enter Indian sectors like telecom, banking, and insurance with greater ease, startups offering digital solutions, infrastructure, cybersecurity, and SaaS platforms will see new business opportunities. They may also benefit from joint ventures or service contracts with larger UK players operating in India.
Simplified Trade Operations
The inclusion of digital trade, paperless documentation, and mutual recognition of standards will streamline logistics and reduce compliance hurdles. This is especially beneficial for startups dealing in e-commerce, exports, or international logistics, where time and operational efficiency are critical.
Scope for Joint R&D and Innovation
The FTA encourages cooperation in innovation, technology, and research. Indian startups in sectors like biotech, climate tech, advanced manufacturing, and AI can collaborate with UK institutions and startups to co-develop global-standard products and solutions.
Risks That Require Preparedness
While the opportunities are strong, there are also challenges. India has agreed to intellectual property rules beyond WTO standards, which could make it harder for pharma and healthtech startups to create affordable solutions. Additionally, increased competition from UK firms in key sectors means Indian startups must remain agile, differentiated, and globally competitive.

[Credits for header image: PIB
This content is for informational purposes only and does not constitute legal, financial, or investment advice. This has been constituted based on third-party sources. We do not assume any liability for actions taken based on this information.]