India UK Free Trade Agreement stands out as a strategic game-changer, as global trade agreements reshape market access and economic partnerships . For India’s food and beverage (F&B) sector—renowned for its diversity, heritage, and quality—this pact is not just a milestone in diplomacy but a transformative lever for growth.
With the UK positioned as a premium, high-value, and trend-sensitive market, the FTA offers a unique opportunity to recalibrate pricing, ease tariff constraints, and expand brand presence. Beyond immediate cost advantages, it opens new channels for product innovation, value-added exports, and long-term competitiveness.
This article unpacks the numbers, pinpoints product-level opportunities, and outlines strategies for Indian F&B exporters to fully harness the FTA’s potential—signalling the start of a new era in India–UK agri-food trade relations.
The finalization of the India–UK Free Trade Agreement (FTA) on May 6, 2025, and its formal signing on July 24, 2025, mark a significant turning point in the bilateral economic relationship between India and the UK. As both nations seek to diversify trade and deepen strategic engagement in a post-Brexit and post-pandemic global order, this comprehensive trade pact aims to enhance market access, reduce tariffs, and foster greater economic integration.
Projected to boost bilateral trade by US$ 120 billion annually by 2030, the FTA can be pivotal for the food and beverage (F&B) sector. This sector holds immense potential due to its diversity, value-addition capacity, and alignment with evolving consumer demands in the UK.
In FY 2024-25, India’s total merchandise trade with the UK reached a new high of US$ 23.1 billion, reflecting a continued upward trajectory driven by robust export performance. India’s exports rose to US$ 14.5 billion, a 12.4% increase over the previous year, while imports remained stable at US$ 8.6 billion, resulting in a record trade surplus of US$ 5.9 billion. This trade surplus signals both the growing competitiveness of Indian goods and the UK’s increasing reliance on Indian products.
India’s F&B exports (HS 02-22, excl ‘05 and ‘06) to the UK grew from US$ 690.4 million in 2019 to US$ 966.1 million in 2024, recording a five-year CAGR of 6.9%. Despite some fluctuations, particularly a dip in 2018 and 2022, exports regained momentum, peaking significantly in 2023 at US$ 946.1 million.
Meanwhile, India’s F&B imports from the UK also witnessed a notable rise, increasing from US$ 200.1 million in 2019 to US$ 367 million in 2024, with a higher five-year CAGR of 12.9%. This indicates a strong demand for premium UK F&B products, especially alcoholic beverages. The trade balance, though fluctuating, consistently has remained in India’s favour, reaching a surplus of US$ 599 million in 2024. This positive trend positions the F&B sector as a key potential beneficiary of the recently signed India-UK FTA, which is expected to further enhance trade flows and economic cooperation in this segment.
India’s food and beverage export basket to the UK is diverse and dominated by six major product categories. Cereals (HS ‘10), primarily basmati and non-basmati rice, accounted for US$ 203.7 million, representing 21% of total F&B exports. This was followed by coffee, tea, maté, and spices, which contributed US$ 164.8 million or 17%, highlighting India’s traditional export strength in these commodities. Marine products such as fish and crustaceans were valued at US$ 106.7 million (11%), while miscellaneous edible preparations—including ready-to-eat foods and condiments—generated value of US$ 88.6 million (9.1%).
Other significant segments include edible vegetables and certain roots and tubers at US$ 76.1 million (7.8%) and preparations of vegetables, fruits, and nuts at US$ 72.1 million (7.4%). These categories reflect growing global demand for plant-based and processed food products—areas where India enjoys a comparative advantage. The remaining 26.2% of F&B exports comprise other diverse items, indicating the potential for expanding niche and innovative food categories under the FTA framework.
Source: ITC Trade Map
In contrast, India’s food and beverage imports from the UK demonstrate a more concentrated import profile. A staggering 92.05% of this total came from beverages, spirits, and vinegar, with imports reaching US$ 337.8 million. This underscores the dominance of premium UK alcoholic beverages—such as Scotch whisky and gin—in Indian markets. Miscellaneous edible preparations followed with just US$ 89.7 million (2.44%), while coffee, tea, and spices accounted for US$ 53.8 million (1.47%).
Dairy produce, including eggs and honey, contributed US$ 23.8 million (0.65%), and fish and crustaceans made up US$ 19.9 million (0.54%). Other minor items comprised 2.85% of total F&B imports. The skewed composition suggests that UK F&B exports to India are heavily reliant on the premium beverage segment, which will undergo a significant transition under the FTA’s phased tariff liberalization.
The FTA introduces significant tariff liberalisation measures aimed at reducing trade friction in the F&B sector. Under the India–UK Free Trade Agreement signed in July 2025, significant tariff liberalisation has been introduced for key F&B products. On the export side, Indian products such as cereals (HS ‘10)—primarily basmati rice, which earlier attracted UK tariffs between 10–16%, now enjoy zero-duty access.
Similarly, spices and tea (HS ’09), which faced 8–12% tariffs, are now duty-free, boosting India’s traditional export strengths. Marine products (HS ’03), earlier taxed at around 12%, also benefit from complete tariff elimination, enhancing India’s competitiveness in seafood exports. Processed foods and edible preparations (HS Code 21 and 20), previously subject to 10–14% duties, now receive preferential or zero tariffs, enabling greater value-added exports.
On the import side, the FTA brings a gradual reduction in Indian tariffs on high-value UK products. Most notably, alcoholic beverages (HS ’22) like whisky and gin, which previously faced steep 150% tariffs, now see a phased reduction: an initial cut to 75%, with a further decline to 40% over 10 years. Other UK-origin products such as dairy (HS ’04) and edible preparations (HS ’21), previously attracting 30-40% tariffs, are also scheduled for phased tariff relief.
Source: ITC Trade Map; data for fastest growing F&B exports at 6-digit level, based on 5-yr CAGR during 2019-24; NA implies value in 2019 was at 0.
In total, 64% of UK F&B exports to India receive immediate tariff elimination, with up to 85% liberalized within a decade. This dual-track liberalization is expected to not only stimulate two-way F&B trade but also increase product diversification and supply chain integration across both markets.
The FTA presents several strategic opportunities for Indian F&B exporters. First, it enhances price competitiveness, especially in the cereals, spices, seafood, and processed food segments, where India has existing export strengths.
Second, the UK market is increasingly driven by consumer demand for ethnic, organic, plant-based, and health-oriented foods—segments where India has strong potential to scale up exports. Millets, frozen ready-to-cook meals, and sustainable packaging solutions are examples of emerging niches that can be effectively targeted.
Third, the agreement supports greater participation of Indian MSMEs in global value chains. Simplified rules of origin (RoO), along with capacity-building provisions and institutional support, can empower smaller exporters to enter the UK market.
Additionally, the reduced cost of compliance through mutual recognition of standards and potential fast-tracking of approvals will make it easier for new exporters to expand internationally.
Conclusion
The India–UK Free Trade Agreement marks a transformative development in India’s trade policy and offers substantial scope for growth in the food and beverage sector. With nearly all major Indian F&B exports receiving duty-free access to the UK, and the UK’s premium products entering India under phased liberalisation, the FTA is poised to deepen economic integration and widen trade flows. For Indian F&B exporters, the opportunity to expand market share, diversify product offerings, and engage more meaningfully with the UK’s high-value F&B ecosystem is now greater than ever.
However, this potential can only be realised through concerted efforts in infrastructure development, regulatory alignment, and institutional coordination. The success of the FTA will depend not only on the removal of tariffs but also on India’s ability to adapt, comply, and compete in one of the world’s most sophisticated food markets.
You must be logged in to post a comment.
Stay ahead in the dynamic world of trade and commerce with India Business & Trade's weekly newsletter.