Daijiworld Media Network - New Delhi
New Delhi, Jul 11: The India-UK Free Trade Agreement will provide greater market access but will not automatically result in higher exports unless India strengthens standards, certification, logistics and buyer networks, economic think tank Global Trade Research Initiative (GTRI) said on Saturday.
The India-UK Comprehensive Economic and Trade Agreement (CETA) is scheduled to come into force on July 15.
"Without parallel work on standards, certification, logistics, regulatory approvals and buyer networks, much of the opportunity will remain on paper. The agreement opens the door; India must now convert access into exports," GTRI said.
GTRI Founder Ajay Srivastava said food exporters would need better testing, traceability and compliance with the United Kingdom's sanitary and phytosanitary standards, while machinery and electronics manufacturers would require certification, technology upgrades and stronger buyer linkages.
He added that automobile exporters would have to comply with rules of origin and technical standards, while garment, leather and footwear manufacturers should move quickly to convert tariff benefits into export orders before competitors adjust.
"The biggest gains are likely where three conditions come together: India has strong export capacity, the UK has substantial demand and CETA removes a meaningful tariff disadvantage. That points most clearly to garments, textiles, leather, footwear, processed foods, seafood and selected farm products," Srivastava said.
According to GTRI's analysis, the strongest export prospects lie in labour-intensive products, processed foods, seafood, automobiles and selected manufactured goods, while sectors such as steel, petroleum and alcohol are unlikely to witness significant gains.
In 2025, the United Kingdom imported goods worth USD 928.9 billion globally, of which only USD 15.2 billion came from India.
India accounted for just 1.6 per cent of total UK imports, while Britain purchased only 3.4 per cent of India's global exports worth USD 445 billion.
Srivastava said a low market share alone should not be interpreted as a major export opportunity.
He noted that export potential depends on four factors: UK demand, India's export capacity, its current market presence in Britain and the tariff advantages created under CETA.
"Standards, food-safety rules, safeguards, certification and supply-chain constraints can matter as much as tariffs," he said.
Sectors where India's manufacturing strengths align with UK demand include garments, textiles, leather, footwear, processed foods, cereals, vegetables, fruits, spices, seafood, meat, automobiles, motorcycles, auto components, machinery, electronics and fabricated metal products.
India exported garments worth USD 16.3 billion globally in 2025, while the UK imported garments worth USD 21.3 billion. India supplied garments worth USD 1.3 billion to Britain, accounting for 6.1 per cent of its imports. Around 8 per cent of India's total garment exports are already destined for the UK, indicating established buyer relationships.
The UK imported processed foods worth USD 33.4 billion last year but sourced only USD 354 million from India, giving Indian products a market share of just 1.1 per cent. India's global exports of processed foods stood at USD 10 billion.
GTRI said the combination of strong UK demand, low Indian market penetration and tariff reductions creates significant opportunities for ready-to-eat foods, bakery products, confectionery, sauces and ethnic food products, although compliance with food safety, labelling and traceability requirements would remain crucial.
Similarly, the UK imported automobile products worth USD 92.2 billion but sourced only USD 325 million from India, giving Indian exporters a market share of just 0.4 per cent despite India's global auto exports of USD 25.1 billion.
The think tank said CETA tariff reductions could support exports of vehicles, motorcycles and auto components, although compliance with rules of origin and technical standards would be decisive.
GTRI also observed that chemicals and pharmaceuticals possess strong export potential but are unlikely to see major gains solely because of the trade agreement.
India exported chemicals worth USD 40 billion globally but supplied only USD 908 million to the UK's USD 35.2 billion chemicals market.
In pharmaceuticals, India exported USD 25.8 billion globally but supplied only USD 1 billion, or 3.2 per cent, of Britain's pharmaceutical imports.
"The opportunity is real, but regulation, quality compliance, environmental rules and procurement matter more than tariffs," the report said.
The think tank noted that iron and steel products illustrate how a trade agreement does not necessarily guarantee market access.
India exported iron and steel products worth USD 20.5 billion globally and supplied USD 959 million to the UK, accounting for 5.2 per cent of British imports.
However, GTRI said the UK's stricter steel safeguard regime, lower quotas and high tariffs beyond quota limits could offset the benefits of CETA, while trade remedies and future carbon-related costs posed additional challenges.
It added that alcohol and wine exports face a different challenge.
Although the UK imported alcoholic beverages worth USD 10.9 billion globally, India supplied only USD 7 million, while its total global exports stood at just USD 456 million.
According to GTRI, the limited exports reflect India's relatively small production scale, weak international brand presence and intense global competition rather than tariff barriers.