UK and India secure £6 billion trading agreement
The UK-India Trade Deal, signed on July 24, 2025, marks a significant milestone in the economic relationship between the two nations. The agreement, estimated to be worth £6bn, promises to bring about substantial changes in various sectors, with both opportunities and challenges for British workers and industries.
Impact on British Workers
The deal is expected to have a positive impact on export-oriented industries such as manufacturing and automotive, with tariffs on goods like whisky, gin, cars, and electrical machinery being significantly reduced. This reduction in tariffs could lead to a 60% increase in UK exports to India and potential job growth in these sectors due to increased demand.
However, the deal may also increase competition for British workers in labour-intensive sectors like textiles, marine products, leather, footwear, and jewellery, as India gains duty-free access to 99% of its exports to the UK. This could lead to job market adjustments as supply chains evolve.
In terms of labour mobility, the deal does not currently include provisions for easier movement for Indian professionals, workers, or students to the UK. This could limit short-term labour mobility benefits for the UK workforce or sectors relying on skilled migration.
Impact on Financial Services Sector
While the deal emphasizes the importance of sectors aligned with the UK’s industrial strategy, including financial services, detailed market access provisions for financial services are less explicit. However, the agreement is expected to support increased financial services trade, including banking, insurance, and asset management, by reducing barriers and fostering collaboration.
The expanded bilateral relationship and trade growth target (£25.5 billion increase annually by 2040) suggest auspicious conditions for financial services growth linked to increased trade flows and investment between the countries.
Summary
The UK-India Trade Deal presents opportunities for British workers in export-oriented manufacturing and related sectors due to increased demand and market access improvements. The financial services sector is expected to gain indirectly through expanded trade and investment opportunities, though specific sectoral liberalization details remain limited publicly.
The absence of visa-related concessions means labour mobility remains a potential sticking point for workforce-related benefits. Overall, bilateral trade is projected to nearly double by 2030, potentially supporting employment growth and economic benefits across multiple sectors.
The deal embodies a collaborative effort to shape a sustainable and prosperous future together, according to Amarjit Singh, Founder and CEO of the India Business Group. Singh urged the business community to seize the opportunities presented by the deal and bring it to life through concrete actions. In 10 years' time, 85% of tariff lines will have no trade levies whatsoever.
[1] UK Government. (2025). UK-India Trade Deal: Factsheet. [online] Available at: https://www.gov.uk/government/publications/uk-india-trade-deal-factsheet
[2] The Guardian. (2025). UK-India trade deal: what it means for jobs, the economy and Brexit. [online] Available at: https://www.theguardian.com/business/2025/jul/24/uk-india-trade-deal-what-it-means-for-jobs-the-economy-and-brexit
[3] The Financial Times. (2025). UK-India trade deal: what does it mean for Britain and India? [online] Available at: https://www.ft.com/content/785b2736-20e7-429a-9033-40d7d2e1355c
[4] The Economic Times. (2025). UK-India trade deal: What's in it for India? [online] Available at: https://economictimes.indiatimes.com/news/international/business/uk-india-trade-deal-whats-in-it-for-india/articleshow/91414756.cms
- The UK-India Trade Deal, which is estimated to be worth £6bn, could lead to a 60% increase in UK exports to India, potentially creating job opportunities in export-oriented industries like manufacturing and automotive.
- The deal's lack of provisions for easier movement of Indian professionals, workers, or students to the UK could limit short-term labour mobility benefits for the UK workforce or sectors relying on skilled migration.
- The UK-India Trade Deal, expected to increase financial services trade by reducing barriers and fostering collaboration, could support the growth of banking, insurance, and asset management sectors indirectly through expanded trade and investment opportunities.
