A third of India’s exports to UK may double by 2030 under new trade pact

Nearly a third of India’s exports to the UK could double by 2030 because of steep tariff cuts and improved market access under the new free trade agreement signed on July 23, according to a Moneycontrol analysis. The sharpest gains could come from high-value sectors such as jewellery, engineering goods, leather, and footwear, the government said.

Both countries have formally committed to doubling bilateral trade from the current $56 billion by 2030, with India aiming to lead the export surge across sectors where tariff barriers have historically weighed down competitiveness.

Among the key gainers are gems and jewellery, where current exports to the UK stand at $941 million, and engineering goods, where shipments are valued at $4 billion. The import duty on gems and jewellery is set to fall from 4 percent to zero, while tariffs on electrical machinery—currently as high as 14 percent—will also be eliminated. India currently holds a 4 percent share in the UK’s electrical machinery imports, 1.2 percent in mechanical machinery, and 5.8 percent in gems and jewellery.

“The India–UK FTA is a timely and strategic breakthrough that will energize our engineering sector. It opens new opportunities for exporters, especially MSMEs, and strengthens our position in global value chains. We commend both governments for their vision and commitment,” said Pankaj Chadha, Chairman of EEPC India.

The leather and footwear sector, which accounts for 5.7 percent of UK’s imports from India, is also expected to benefit from a complete phase-out of the 16 percent import duty. Government projections suggest this could lead to an additional 5 percent gain in market share for Indian exporters in this segment.

“This is a transformative economic partnership agreement that will open up nearly 100% of trade between the two dynamic economies. It will eliminate tariffs on key Indian exports—from textiles and auto parts to seafood and jewellery—boosting MSMEs, job creation, and growth in labour-intensive sectors,” said Agneshwar Sen, Trade Policy Leader, EY India.

Beyond these core sectors, India is also targeting expansion in emerging and mid-scale categories. For example, toy exports—currently modest—are expected to reach $187 million by 2030, while agriculture exports, now at $470 million, are projected to rise by another 20 percent.

In processed foods, where India accounts for just 1 percent of the UK’s total imports, the trade agreement provides for some of the steepest tariff cuts—from rates as high as 70 percent to zero. This is expected to significantly enhance India’s competitiveness in ready-to-eat and packaged food items.

The chemicals sector—which saw $597 million worth of exports from India in 2024—is poised for a 30–40 percent jump in the current fiscal alone, according to the Indian government. Organic chemicals currently face an 8 percent duty, while inorganic chemicals are taxed at 4 percent, both of which are set to be reduced under the agreement.

A Moneycontrol analysis shows that of India’s $15.2 billion in exports to the UK in 2024, only 3.8 percent of product categories had less than a 10 percent share in the UK’s total imports, indicating significant room for growth in high-potential segments. Meanwhile, only $3.68 billion worth of goods (a quarter of total exports) had more than 5 percent market share, suggesting that a wider base of Indian exports could benefit from tariff cuts and climb into higher share brackets.

Marine products, for instance, currently face duties of up to 20 percent and account for just 3.7 percent of the UK’s imports. Likewise, textiles and clothing, with a current market share of 6.6 percent, and tea, coffee, and spices, at 7.8 percent, are also being targeted for expansion into the 10 percent+ market share category.

An earlier Moneycontrol analysis found that tariff reductions under the agreement would help India gain a price advantage over China and Pakistan, particularly in categories such as textiles, spices, and processed foods. With electrical machinery exports—including smartphones—also expected to grow from the current 4 percent share, the trade pact opens a wide window of opportunity for India to consolidate and diversify its export portfolio with one of its oldest trading partners.