After three years of negotiations, the UK and India have signed a landmark Free Trade Agreement (FTA) that marks a new era in bilateral trade. The deal eliminates tariffs on 99 per cent of Indian exports and cuts tariffs on 90 per cent of UK exports to India, with the chemical sector emerging as one of the biggest winners.

Indian chemical exports, which previously faced tariffs of 0–8 per cent in the UK, will enjoy near-complete duty-free access (once the FTA comes into force), which unlocks major growth opportunities. India’s chemical exports alone are expected to jump from $435 million in 2024 to $1 billion by 2027, driven by stronger price competitiveness and easier market access. UK companies, in turn, will gain a smoother path into one of the world’s fastest-growing markets.

A New Boom for the UK Chemical Sector
For UK businesses, the FTA is more than just a policy shift—it is a significant opening for growth. With tariffs on most Indian chemicals reduced to zero, imports like carbon black, castor oil derivatives, agrochemicals, and dyes will now come in at lower costs. This directly reduces input expenses for UK manufacturers, allowing them to either lower product prices or improve profit margins.

The impact is especially promising for the pharmaceutical and biotech sectors. Key ingredients like heterocyclic compounds, vital for drug development, will now be more affordable—fuelling innovation, scaling up R&D, and strengthening the UK’s global competitiveness in life sciences.

Looking ahead, the FTA is expected to deliver a £1.7 billion boost to the UK economy by 2030, bringing not just stronger industrial output but also job creation and a more influential role in international trade.

India’s Chemical Industry Set for Explosive Growth
In India, the excitement is palpable. For years, Indian chemical exporters faced cost disadvantages due to tariffs, but now they stand on equal footing. With almost 99 per cent of exports to the UK enjoying zero duty, Indian companies are preparing to seize the moment.

The opportunity is not just in numbers, but it is also in growth, innovation, and employment. From phenols and agrochemicals to essential oils and pigments, demand is rising, and Indian manufacturers are ramping up production. The export boom is expected to create thousands of new jobs and encourage investments in infrastructure and capacity.

Large players like TATA Chemicals, SRF Ltd, and UPL are especially well-positioned. These companies are expected to see revenue growth of 10–12 per cent due to the FTA.

With reduced tariffs on UK chemical imports like iodine, aniline, and specialty agrochemical molecules, Indian manufacturers can access critical raw materials more affordably. This means higher profit margins, improved product quality, and the ability to innovate faster.

Most importantly, the FTA strengthens supply chain resilience. In a world where disruption has become the norm, the India-UK partnership offers a blueprint for dependable, mutually beneficial trade.