India to Lose ₹4,060 Cr Revenue in First Year of UK Trade Pact: GTRI Report

Rapid summary

• India-U.K. Free Trade Agreement (FTA): Signed on July 24, 2025, the FTA aims to reduce or eliminate tariffs on a wide range of goods.
• customs Revenue Impact:

– India is expected to lose ₹4,060 crore in customs revenue in the first year due to reduced tariffs on imports from the U.K., based on FY2025 trade data. Loss will rise to ₹6,345 crore by the tenth year as tariff elimination phases-in more broadly.
– The U.K.,which imported $14.5 billion worth of goods from india last fiscal year with a weighted average import tariff of 3.3%, may face an estimated annual revenue loss of £375 million (₹3,884 crore).

• Trade Volumes: india imported $8.6 billion worth of goods from the U.K. in FY2024-25, mostly industrial products facing a current weighted average tariff of 9.2%. Agricultural items mostly excluded except specific products like whisky and gin (which currently carry higher tariffs).
• Tariff Commitments:

– India will eliminate tariffs instantly for 64% value of imports and progressively phase out tariffs for up to 85% value overall; about 5% product lines will see reduced rates.
– The U.K.’s plan eliminates tariffs entirely for almost all Indian exports (~99%).

• Framework Approval Needed: Implementation could take around a year pending Parliamentary approval in Britain.

Indian Opinion analysis

The India-U.K Free Trade agreement represents a significant advancement in bilateral economic ties between two nations with robust trade relationships rooted both economically and historically. For India, while fostering export growth through tariff-free access for most industrial sectors into one of its key trading partners’ markets-currently valued at $14.5 billion annually-it also brings opportunities for job creation and expanded market footprints across strategic vertical segments domestically exporting mapped across complementary discipline-links lucrative niches opening g.T