India–UK FTA Gains Will Remain Untapped Without Standards And Certification Push: GTRI

New Delhi, Jul 13 (KNN) India’s free trade agreement (FTA) with the United Kingdom may improve market access for exporters, but tariff reductions alone will not be enough to fully realise its export potential, according to the Global Trade Research Initiative (GTRI).

The think tank said that while the India–UK Comprehensive Economic and Trade Agreement (CETA), effective July 15, lowers duties on several products, its benefits will depend on India’s ability to meet regulatory and quality standards in the UK market.

Focus Needed on Standards and Logistics

GTRI founder Ajay Srivastava, said, "Without parallel work on standards, certification, logistics, regulatory approvals and buyer networks, much of the opportunity will remain on paper. The agreement opens the door; India must now convert access into exports," TOI reported.

Different sectors are expected to face varied challenges. Food exporters, for instance, will need to comply with strict safety, testing and traceability requirements, while engineering and electronics firms must secure globally recognised certifications and strengthen commercial partnerships, he added.

Similarly, automobile exporters will have to adhere to rules of origin and technical standards.

Market Share Remains Modest

In 2025, the UK imported USD 928.9 billion in goods but only USD 15.2 billion from India (1.6 per cent), while accounting for just 3.4 per cent of India’s USD 445 billion exports. Low market share alone does not signal opportunity; it depends on four factors: UK demand, India’s capacity, current presence, and CETA tariff advantages. 

"Standards, food-safety rules, safeguards, certification and supply-chain constraints can matter as much as tariffs," Srivastava noted.

Opportunities Concentrated in Select Sectors

The report identified labour-intensive sectors such as garments, textiles, leather goods, footwear, processed food and seafood as likely to benefit the most. 

The GTRI founder said, "The biggest gains are likely where three conditions come together: India has strong export capacity, the UK has substantial demand and CETA removes a meaningful tariff disadvantage. That points most clearly to garments, textiles, leather, footwear, processed foods, seafood and selected farm products." 

High-potential sectors include garments, textiles, leather, processed foods, agri products, auto components, machinery and electronics. For instance, India has a 6.1 per cent share in UK garment imports (with strong existing ties), but only 1.1 per cent in processed foods and 0.4 per cent in autos despite large UK demand—indicating room to grow, subject to compliance and rules of origin.

"Large UK demand, low Indian penetration and tariff cuts create strong potential in ready-to-eat foods, bakery and confectionery products, sauces and ethnic foods. Food safety, labelling and traceability will remain critical," he added.

Limited Gains in Some Segments

GTRI cautioned that tariff concessions may have limited impact in chemicals and pharmaceuticals, where regulatory approvals and quality standards outweigh duty advantages. 

"The opportunity is real, but regulation, quality compliance, environmental rules and procurement matter more than tariffs," GTRI noted.

Steel exports may also face constraints from UK safeguard measures.

It said that, "the UK's tighter steel safeguard regime, reduced quotas and high above-quota tariffs can overwhelm CETA preferences. Trade remedies and future carbon costs add further risks."

Similarly, India’s alcohol exports are unlikely to see significant gains, constrained by limited scale, weak brand presence, and intense global competition rather than tariffs. Overall, market access will depend more on regulation and competitiveness than on tariff cuts.

(KNN Bureau)