India‑UK trade pact promises big gains for youth, MSMEs and startups

Prime Minister Narendra Modi has heralded the newly signed India‑UK Free Trade Agreement (FTA) as a game‑changer for Indian youth, MSMEs, startups and regional economies. He announced that following the agreement, 99% of Indian products sold in the UK will be duty‑free, significantly boosting Indian manufacturing and opening new opportunities for exporters.

The deal was finalised in the presence of PM Modi and UK Prime Minister Keir Starmer. India cut tariffs on 90% of British goods—including whisky, medical devices and automobiles—with many of these reductions staged over a decade.

At the same time, the UK agreed to eliminate duties on nearly all Indian exports, covering key sectors such as textiles, leather, gems & jewellery, marine products, engineering goods and auto components.

Piyush Goyal, India’s Commerce and Industry Minister, described the FTA as "game‑changing," offering “immense opportunities” to youth, MSMEs, workers, farmers and artisans across India. He emphasised that the agreement came without compromising India’s strategic interests.

Ritesh Agarwal, founder of Oyo, commented that Indian startups stand to gain massively from the pact, with enhanced market access, investment flows, cross‑border collaboration and job creation.

Markets like Tamil Nadu—including handlooms, seafood, textiles and leather—are expected to benefit as traditional sectors become more competitive due to duty‑free access. PM Modi specifically highlighted that youth, small industries and startups in Tamil Nadu would reap significant benefits.

Industry forecasts are equally optimistic. The Confederation of Indian Industry (CII), Coimbatore chapter estimates the FTA may generate over 130,000 new jobs in the region.

On the projected economic impact, the UK government anticipates a £25.5 billion annual increase in bilateral trade by 2040 and a £4.8 billion boost to UK GDP, along with wage gains of £2.2 billion per year.

For Indian startups, digital firms, and global capability centres, the agreement promises reduced compliance hurdles, streamlined mobility under the Double Contribution Convention, and easier access to the UK market.

The deal also opens collaboration possibilities in fintech, AI, cloud services and other emerging sectors.

This inclusive agreement positions India to boost Make in India exports, enhance equity for regional sectors like Rajasthan's gems and textiles, and strengthen innovation ecosystems across the country.