Learn What the UK-India Free Trade Agreement Means for Global Employers

On 6th May 2025, the UK and India signed a landmark Free Trade Agreement (FTA) and a Double Contribution Convention, marking a significant milestone in their Comprehensive Strategic Partnership. While the headlines celebrated diplomatic success, business leaders are scanning beyond the immediate fanfare, assessing how this deal may fundamentally alter cross-border commerce, talent mobility, and growth strategy for decades to come. 

India and the UK: From Growing Trade Ties to Strategic Alignment 

India has been the UK’s fastest-growing major trading partner over the past decade. The new agreement sets a bold target: double bilateral trade to £75 billion by 2030. 

 It reflects economic momentum that’s already in motion. According to Grant Thornton Bharat’s Britain Meets India 2024 report: 

• 667 UK-owned or controlled companies are now active in India—a 5% increase from the previous year. 

• These firms collectively generate over ₹5,082 billion (£47 billion) in annual turnover. 

• More than 500,000 individuals are employed across sectors ranging from business services to technology and manufacturing. 

• 162 companies qualify for the exclusive ‘Growth Tracker,’ having achieved annual revenues exceeding ₹500 million, annual revenue growth of at least 10%, and a minimum two-years of filing with India’s Ministry of Corporate Affairs. 

 

While large multinationals make headlines, 63% of UK firms operating in India fall under the Micro, Small, and Medium Enterprise (MSME) category—underscoring the growing accessibility of cross-border trade, not just for giants but for agile, scaling companies. 

 

What Makes This FTA Different? Practical Gains, Not Just Promises 

Most trade agreements are long on optimism but short on details that matter to business operators. This one’s different. It introduces practical, actionable changes across three dimensions: 

1. Labour Mobility Simplified

For business and HR leaders, talent strategy often hits friction when it crosses borders. The FTA introduces a three-year exemption from social security contributions for Indian nationals working in the UK—a move that significantly lowers the cost of international assignments.  

Additionally, streamlined visa provisions will support faster deployment of skilled professionals, enabling firms to build agile cross-border teams without the usual red tape. 

 

2. Sector-Specific Tariff Reductions

• Textiles: Indian textile exporters gain increased access to UK markets, reducing costs and boosting margins. 

• Automotive: Tariffs on UK automobiles exported to India will drop from 100%+ to just 10% (within quotas), opening new revenue channels for UK carmakers. 

• Alcohol: UK whisky exporters—facing one of the steepest global tariffs—will benefit from a drop from 150% to 40%, with projected growth of £1 billion over five years. 

This represents real margin recovery and entry opportunities into one of the world’s most promising consumer markets. 

Global Workforce Strategy: A New Era of Agility 

In today’s globally distributed workforce, the ability to move talent—not just capital—determines competitive advantage. The FTA allows HR leaders to move faster, reduce risk, and tap into rich talent pools on both sides. For UK-based firms, this means easier access to India’s deep tech, finance, and professional services ecosystem. For Indian firms, the UK offers a stable base with high innovation potential and clear regulatory pathways for expansion. 

Whether you’re scaling your delivery capabilities or building a global leadership pipeline, this new mobility framework can help accelerate time to value. 

Rethinking Operational Efficiency: Offshoring Meets Strategy 

Offshoring is evolving. It’s no longer just about cost arbitrage—it’s a lever for strategic resilience. As the FTA removes structural inefficiencies, India’s long-standing advantages—sectoral depth, infrastructure maturity, and labour cost competitiveness becomes even more potent. Whether you are building a shared services hub or R&D lab, India’s proposition now comes with a stronger regulatory safety net. 

Conversely, Indian firms looking to establish a foothold in Europe may find the UK more accessible than ever. With greater clarity on tax treatment and employment frameworks, setting up a UK-based delivery centre or regional HQ now makes sound strategic sense. 

 

Strategic Takeaways for Business Leaders 

For global executives, investors, and HR decision-makers, the UK–India FTA is a strategic moment of clarity. 

Here’s how to respond: 

• Reassess your workforce model: How does increased labour mobility impact your global HR strategy? 

• Evaluate your tax and compliance exposure: Are you prepared for the implications of the Double Contribution Convention? 

• Explore offshoring with renewed intent: Is now the right time to expand shared services, R&D, or delivery teams into India? 

• Position for long-term market access: Should your India or UK operations now serve as your regional springboard? 

 

Consult. Plan. Execute. But Don’t Wait. 

Navigating these shifts requires deep understanding, not only of tax and trade frameworks, but of local employment law, compliance obligations, and workforce best practices. 

That’s where a consultative partner matters. 

At TopSource Worldwide, we help companies convert opportunity into impact. Whether you’re entering a new market via Employer of Record (EOR), or scaling long-term presence through entity setup, payroll, and HR advisory, our mission is to de-risk your journey and unlock global talent with confidence. 

 

Need help evaluating your next move? 

Navigating the implications of the UK–India FTA requires more than just market awareness – it calls for strategic workforce planning, compliance readiness, and local expertise in both the regions. 

Learn more about employing in India → Explore India EOR Solutions 

Learn more about employing in the UK → Explore UK EOR Solutions