Key take-aways - India's evolving trade ties with the UK and the EU

In our recent Ashurst Trade Pulse Webinar Series, we explored the evolving trade landscape between India, the UK, and the EU, focusing on the newly concluded UK–India Free Trade Agreement (FTA) and ongoing EU–India FTA negotiations. Here are the main insights:

1. Shifting Global Trade Dynamics

• Rising nationalism, supply chain shifts, and strategic autonomy are fragmenting global trade and fueling protectionist policies, making cross-border business more complex.

• As traditional partnerships weaken, new trade agreements are unlocking access to previously restricted markets and creating fresh business opportunities.

• India, now the world’s most populous country and set to become the third-largest economy by 2030, remains a high-tariff, highly regulated market. However, recent FTAs with the UK and ongoing negotiations with the EU are paving the way for greater market access and growth.

2. UK–India FTA: A New Era of Market Access

• The UK–India FTA, concluded in 2025 and expected to come into force by early 2026, promises significant tariff reductions and expanded market access.

• Key sectors benefiting include advanced manufacturing, agrifood, automotive, and financial services. Notably, UK firms will gain fairer access to India’s financial sector, and for the first time, UK businesses can participate in India’s vast public procurement market.

• The agreement introduces improved customs procedures, regulatory cooperation, and a dedicated dispute settlement mechanism.

3. EU–India FTA: Negotiations and Opportunities

• EU–India trade has grown rapidly, with bilateral trade in goods reaching €124 billion in 2023.
• Negotiations cover 23 policy areas, aiming to lower tariffs in sectors like automobiles, medical devices, spirits, and pharmaceuticals, while addressing regulatory alignment and sustainability.
• Outstanding issues include the EU’s Carbon Border Adjustment Mechanism (CBAM) and deforestation regulations.

4. Practical Business Implications

• Both FTAs are expected to deliver substantial benefits: lower tariffs, expanded market access for goods and services, increased investment opportunities, and reduced administrative barriers.
• However, businesses must navigate complex rules of origin, customs compliance, and regulatory requirements to fully leverage these agreements.
• The FTAs are seen as more than trade deals—they represent strategic alliances with the potential to reshape regional influence and long-term business strategies.

5. Strategic Outlook

• Companies are encouraged to assess their readiness for the new Free Trade Agreements (FTAs), with a focus on supply-chain planning, regulatory due diligence, and compliance with rules of origin (RoO). This includes a thorough understanding of the often complex, product-specific RoO criteria—such as "wholly obtained" or "substantially transformed"—as well as the unique features of each FTA, including concepts like the “co-equal” approach. Ensuring robust documentation and traceability throughout the supply chain is essential to demonstrate compliance and maximize the benefits of the agreements.

• The agreements offer significant opportunities for growth, but success will depend on proactive adaptation to the new trade frameworks and regulatory environments.

If you missed the session, the full recording is available here.