New Delhi (ABC Live): The India–UK Free Trade Agreement (FTA), signed on 24 July 2025, creates a strategic pathway for MSMEs to expand into one of the world’s most sophisticated markets. With 99% of Indian exports to the UK becoming duty-free, Indian MSMEs in textiles, gems, pharma, IT, and processed foods stand to gain the
New Delhi (ABC Live): The India–UK Free Trade Agreement (FTA), signed on 24 July 2025, creates a strategic pathway for MSMEs to expand into one of the world’s most sophisticated markets. With 99% of Indian exports to the UK becoming duty-free, Indian MSMEs in textiles, gems, pharma, IT, and processed foods stand to gain the most.
Here’s how—with supporting data.
? MSME Contribution to India–UK Trade
| Indicator | Value |
|---|---|
| India’s merchandise exports to UK (2023–24) | $11.4 billion |
| Share of MSMEs in India’s total exports | 48.6% (per Ministry of MSME, 2024) |
| Estimated MSME exports to UK | ~$5.5 billion |
| Targeted MSME export growth post-FTA | 35–40% by 2030 |
| Jobs linked to MSME exports | ~1 million projected by 2030 (direct & indirect) |
Data Source: DGFT, FIEO, Ministry of MSME, UK Department for Business and Trade
? Sector-Wise MSME Gains (Projected Growth by 2030)
| Sector | Pre-FTA Avg Tariff | Post-FTA Tariff | Projected Export Growth |
|---|---|---|---|
| Textiles & Garments | 12% | 0% | 40–45% |
| Gems & Jewellery | 10% | 0% | 30–35% |
| Leather & Footwear | 8–10% | 0% | 25–30% |
| Pharmaceuticals | Regulatory delay | Mutual recognition | 20–25% |
| Processed Foods | SPS compliance barrier | Streamlined rules | 25–30% |
| IT & Services (SaaS, fintech, edu) | Limited mobility | Up to 2-year deployment | 30–50% revenue potential |
? Regional MSME Clusters That Will Benefit
| Cluster | Specialization | UK FTA Opportunity |
|---|---|---|
| Tiruppur (TN) | Knitted garments | Duty-free access; major UK retailer sourcing |
| Surat (GJ) | Diamonds, fabrics | 0% tariffs on gems; high-margin design exports |
| Moradabad (UP) | Handicrafts & brassware | Preferential procurement, heritage design |
| Ludhiana (PB) | Woolens, hosiery | Cold climate apparel demand in UK |
| Hyderabad & Bengaluru | Pharma, SaaS, biotech | Regulatory ease + digital trade |
| Pune, Noida, Chennai | Auto components, electronics | Quota-based but steady opening for components |
? Services & IT MSMEs: What the Data Shows
| Metric | Value |
|---|---|
| Services exports from India to UK (2023–24) | $8.5 billion |
| Estimated MSME share in services exports | ~25–30% (mostly IT, BPO, SaaS) |
| Potential growth post-FTA | 30–50% (with mobility + e-contracts) |
| Indian professionals allowed annually | Up to 75,000 under new mobility regime |
? Realistic MSME Export Growth Scenarios (2025–2030)
| Growth Type | Conservative Scenario | Optimistic Scenario |
|---|---|---|
| Annual MSME Export Growth to UK | 7–9% CAGR | 12–14% CAGR |
| 5-Year Cumulative Export Value | $8.2–9.0 billion | $11–12.5 billion |
| Employment Generation | 0.6–0.8 million | 1–1.2 million |
? How MSMEs Should Act — Based on Data
1. Focus on Export-Ready Sectors
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Prioritize high-growth categories with tariff elimination and existing demand in the UK
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Use DGFT’s RoDTEP portal to check for incentives
2. Benchmark Against High-Performing States
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Tamil Nadu, Gujarat, Maharashtra, and Punjab already contribute >65% of India’s MSME exports
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Follow state-level export facilitation programs (e.g., Tamil Nadu Exports Promotion Council)
3. Utilize Trade Platforms and EPCs
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FIEO, SEPC, and APEDA provide hand-holding for UK standards
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Join upcoming UK–India trade expos, both in-person and virtual
? Summary Table: MSME FTA Benefits with Metrics
| Category | Data / Projection |
|---|---|
| Duty-Free Access | 99% of Indian products |
| MSME Export Share | 48.6% of total exports |
| Projected MSME Export Growth | 35–40% by 2030 |
| Job Creation | 1 million (direct + indirect) |
| Services Mobility | Up to 75,000 Indian professionals permitted |
| Regional Clusters | Tiruppur, Moradabad, Ludhiana, Surat, Hyderabad, Pune |
? Conclusion
The India–UK FTA is a golden opportunity for Indian MSMEs—but only if they are FTA-ready. Data shows strong growth potential in exports, services, and job creation. To realize this potential, MSMEs must:
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Embrace digital trade and cross-border e-commerce
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Meet UK certification and documentation requirements
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Collaborate with EPCs and leverage government schemes
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Use data tools like ICEGATE, DGFT dashboards, and SEPC portals to track benefits
MSMEs that prepare, adapt, and innovate will lead India’s global trade transformation under this FTA.
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