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India-UK FTA Deal – Key Sector impact and beneficiaries

ICICIdirect Research 25 Jul 2025 DISCLAIMER

Textiles
UK Textile imports stood at ~USD 27bn out of which Indian imports into UK stood at ~USD 1.8bn which is just ~7% of the total imports.
Duty free access places India on par with Pakistan, Bangladesh and Cambodia who already have FTA with the UK.
India currently pays tariff of 8-12% on textile exports (including apparels and home textile products) while Bangladesh and Cambodia do not pay any tariffs on exports of textile products to UK.
Ready-made garments, home textiles, Carpets are key areas where India can gain competitive advantage.
With the FTA, India expects to gain 5% additional market share in the next 2 years.

Key beneficiaries in garments: Gokaldas Exports (UK saliency ~5%), KPR Mills (Europe including UK is 58% of revenues) and SP Apparels (largely kids wear; UK saliency 45%).
Key beneficiaries in Home Textile: Indo Count Industries (UK Saliency ~12%); Welspun Living (UK Saliency ~15%).
 

Agricultural Goods and Foods
India will get duty-free access to several agri-goods in the UK. Key products include Turmeric, pepper and Processed foods like Ready to Eat foods, pickles, pulses etc. The deal gives zero duty access to over 95% of the agricultural and processed foods products.
Indian Agricultural exports stood at $51bn in FY25 while the UK imports ~USD 38bn worth of agricultural products. Out of the USD38bn, UK Imports close USD1bn from India signalling significant headroom for growth.
Duty Free access is expected to increase agri-exports to the UK by over 20% in the next 3 years.
Key beneficiaries: Tata Consumer products (strong positioning in UK’s black tea market; Tata Sampann provides scope to explore opportunities in Pulses, Ready to Eat foods, pickles and spices) and ITC (Agri exports saliency is ~40% of the agri business revenues; it is leading exporters of spices like chilli, turmeric, coriander and cumin).
 
Gems and Jewellery
India’s total Gems & Jewellery (G&J) exports to UK stood at USD 941mn with almost 50% (USD 400mn) is contributed by jewellery. The total imports by UK stands at ~USD 3bn which poses significant growth headroom for India.
Earlier Jewellery used to attract ~4% rate which will now be reduced to 0% post the signing of FTA.
Key beneficiaries: Titan Company, Kalyan Jewellers and Vaibhav global (UK salience of fashion jewellery and lifestyle accessories is 40-45%)
 
Footwear
Indian Footwear imports by the UK attracted tariff of 16% which now enjoys 0% post the FTA.
The Footwear exports currently stand at USD 440mn to the UK is expected to now touch USD 1bn in the next 2 years due to the FTA.
Key beneficiaries: Mirza International (footwear exports 75% of revenues; UK export saliency is 45%); Metro Brands and Relaxo Footwear.
 
Liqour
The reduction in tariff on scotch whisky or gin will be cost effective for Indian liquor manufacturing companies. Most of these companies imports scotch in bulk quantity to blend with their premium liquor brands. Hence reduction in tariff will help to reduce the import cost of raw material.
India will be cutting tariffs on scotch whiskies and gin imported from UK from 150% to 75%, following it to 40% over the period of 10 years.
View: The reduction tariff on scotch whisky provides cost opportunity rather than significant risk on sales volumes of the premium products in the near term. Any foreign brand trying to enter the Indian market does not have distribution presence in the country and will try to enter into the Indian market through potential tie-up with the Indian company.
Key beneficiaries of reduction in tariff of scotch whisky – Allied Blenders & Distilleries, Radico Khaitan and United Spirts

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