The India-UK Free Trade Agreement (FTA), signed on July 24, 2025, is set to transform bilateral trade, with a target of reaching $120 billion in five years, up from the current $56 billion, according to National Stock Exchange (NSE) CEO Ashish Chauhan. Chauhan emphasized the FTA’s breakthrough for India’s services sector, projecting even greater growth potential in IT, pharmaceuticals, agriculture, and labor-intensive industries.

Union Commerce Minister Piyush Goyal highlighted on X that the FTA unlocks $23 billion in opportunities for sectors like textiles, leather, and footwear, fostering inclusive and gender-equitable growth.

A key win is the three-year exemption from UK social security contributions for 75,000 Indian workers, saving nearly $463 million annually for professionals and employers, particularly in IT firms like TCS and Infosys. Additionally, up to 1,800 Indian chefs, yoga instructors, and classical musicians can temporarily provide services in the UK, boosting cultural exports.

Chauhan noted India’s historical disadvantage under the WTO regime, where China reaped disproportionate benefits. “The shift to bilateral deals like this FTA positions India to gain significantly,” he said, citing fairer terms for services and merchandise trade, currently at $24 billion with a surplus favoring India. The agreement also resolves a long-standing issue: Indian professionals previously paid UK social security taxes without benefits. This exemption enhances their earnings and signals a liberalized visa regime, enabling longer work periods in the UK.

Also Read: Historic India-UK Trade Pact Set for July 24 Signing in London

Despite the gains, India failed to secure an exemption from the UK’s Carbon Border Adjustment Mechanism (CBAM), set for 2027, which could impose 14-24% taxes on carbon-intensive exports like steel and aluminium, potentially offsetting tariff benefits.

Also Read: India-UK CETA: A Game-Changing Trade Pact Explained