Key Takeaways
- The UK-India Free Trade Agreement (FTA) removes tariffs on the majority of Indian exports, significantly boosting chemical trade by 2027.
- UK chemical companies benefit from reduced input costs, enhancing profitability and driving innovation.
- Indian chemical manufacturers are poised for substantial growth, higher production volumes, and increased employment.
- The FTA strengthens supply chain resilience, ensuring more stable and efficient trade between the two nations.
After three years of negotiations, the UK and India have signed a landmark FTA that redefines their economic partnership. The agreement eliminates tariffs on 99% of Indian exports and reduces tariffs on 90% of UK exports to India. Among all sectors, chemicals emerge as a key beneficiary.
Indian chemical exports, previously subject to 0–8% UK tariffs, will now enjoy nearly full duty-free access. This shift is expected to drive exports from $435 million in 2024 to $1 billion by 2027, thanks to improved market access and cost competitiveness. UK firms, in turn, gain easier access to one of the world’s fastest-growing economies.
Unlocking Growth for the UK Chemical Sector
For UK businesses, this FTA marks a strategic growth opportunity. With tariffs on Indian chemicals like carbon black, castor oil derivatives, agrochemicals, and dyes eliminated, import costs will fall—allowing manufacturers to boost margins or reduce consumer prices.
This is especially impactful for the pharmaceutical and biotech industries. Lower-cost access to essential inputs such as heterocyclic compounds—critical in drug development—will accelerate innovation, expand R&D capabilities, and enhance the UK’s global position in life sciences.
Economically, the FTA is projected to contribute £1.7 billion to the UK economy by 2030, driving industrial expansion, job creation, and global trade influence.
India’s Chemical Sector on a Growth Trajectory
In India, the FTA has sparked enthusiasm across the chemical industry. With nearly 99% of exports to the UK now tariff-free, Indian producers are positioned to compete more effectively on the global stage.
This opportunity extends beyond trade volume. Demand for Indian products—from phenols and agrochemicals to essential oils and pigments—is rising sharply. In response, manufacturers are scaling up operations, driving innovation, and creating thousands of new jobs. The surge in exports is also expected to attract significant investment in infrastructure and production capacity.
Meena Ansari is the co-founder and business partner at M/s Tex Aux Chemicals. A passionate writer at heart, she brings a deep curiosity and love for learning to every aspect of the textile industry. With a keen interest in exploring innovations and sharing insights, Meena combines her entrepreneurial experience with a flair for storytelling to educate and inspire readers across the textile community.
