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After three years of intensive negotiations, India and the United Kingdom (UK) successfully concluded a landmark Free Trade Agreement (FTA) on 6 May 2025. Hailed by the leaders of both nations as a historic milestone in their Comprehensive Strategic Partnership, the agreement is poised to deepen trade and investment ties, promote innovation, and support job creation across both economies. It is projected to boost bilateral trade by approximately £25–34 billion by 20401 and enhance the overall well-being of citizens. The FTA also opens avenues for India and the UK to jointly develop products and services for global markets.
This marks India's first major FTA outside Asia, granting 99% of its exports significant benefits through duty-free access to the UK market. Key sectors expected to gain include textiles, leather, agriculture, seafood, gems, and automotive components.
In parallel with the FTA, both governments have signed a Double Contributions Convention (DCC), allowing employees and their employers to pay social security contributions in only one country at a time. This provision applies to individuals on temporary assignments of up to three years, streamlining cross-border workforce mobility.
Data from our International Business Report, the world’s leading survey of mid-market companies, which surveys the expectations of around 100,000 businesses in 28 countries, indicates that Indian businesses have consistently viewed the UK as a priority market for international growth and their preferred destination for expansion.
This preference is reflected in the growing presence of Indian companies in the region. The 12th edition of our India Meets Britain Tracker2 reveals that, as of 2025, there are 1,197 Indian companies operating in the UK—a 23% increase from 971 the previous year. Collectively, these companies report a turnover of £72.14 billion. Of these, 74 Indian-owned businesses recorded annual growth of 10% or more. The leading sectors include technology, media and telecoms (TMT), pharmaceuticals and chemicals, and manufacturing and engineering.
While a significant proportion (66%) of the Indian firms surveyed already have a strong base in the UK, our latest IBR data highlights growing optimism among mid-market companies. An impressive 99% are planning to expand their UK operations, with 69% aiming to do so within the next 12 months. Among those without an existing presence, nearly 90% are looking to establish one.
UK businesses mirror this enthusiasm regarding India. Building on the countries’ deepening economic ties, around 96% of UK mid-market firms plan to expand into India, with 52% targeting entry within the next 12 months. Among those exploring international expansion, 74% have identified India as their top choice.
Despite global economic headwinds in 2024, the UK economy demonstrated resilience, recording a 1.1% increase in real GDP. With growth projected at 1.0% in 2025, the UK continues to offer a stable, business-friendly environment. For Indian firms, establishing a presence there not only provides access to the domestic market but also serves as a gateway to Europe, enabling companies to reach a broader consumer base. With the advantages of a shared language and attractive government incentives, mid-market firms cite several key drivers behind their interest in the UK:
In the lead-up to the FTA’s conclusion, Indian businesses were anticipating a range of strategic advantages, including:
The agreement delivers on many of these expectations, introducing tangible improvements across key areas. It promotes sound regulatory practices, enhances transparency, and addresses non-tariff barriers to facilitate the seamless flow of goods and services. Both nations stand to benefit from the proposed tariff reductions. India has committed to substantially reducing tariffs on 90% of tariff lines, covering 92% of UK imports¹, while the UK will grant immediate duty-free access to 99% of Indian exports.
Despite the optimism surrounding the FTA, several Indian mid-market firms remain cautious about aspects of its implementation. From regulatory compliance to sector-specific implications, businesses seek greater clarity on how the agreement will translate into practical outcomes. Although 15% of firms express no reservations and view the FTA as a positive step forward, others have identified areas where additional support or transparency could help maximise its impact:
The agreement is anticipated to be formally signed by the end of July 2025, marking a major milestone in strengthening India–UK trade ties. As both nations move towards implementation, the coming months will be critical in shaping how this new era of economic cooperation translates into real opportunities and enduring growth—particularly for mid-market businesses on both sides of the India-UK corridor.
Grant Thornton has been active in the India–UK corridor for nearly three decades, supporting businesses in both countries in identifying and pursuing growth opportunities. Our insights and focus on quality help organisations navigate dynamic market conditions and achieve their strategic goals. We collaborate with the public sector to build thriving communities and work with regulators and financial institutions to strengthen trust and integrity in markets. Backed by a globally connected team, we are well-positioned to support businesses expanding into the UK or entering India. Being part of our network gives you access to cross-border expertise and ideas worldwide.
The International Business Report (IBR) is the world’s leading survey of mid-market companies. Launched in 1992, the IBR now provides insights into the views and expectations of around 10,000 businesses across 28 economies. The research takes place twice a year and involves interviews with chief executive officers, managing directors, chairpersons, or other senior executives from all industry sectors. Questionnaires are translated into local languages, and fieldwork is undertaken through both online and telephone interviews. The IBR data is referenced extensively in thought leadership by the Grant Thornton network and serves as the basis for our Global Business Pulse, the first index to track the health of mid-sized companies at global, regional, country, and sector levels.