UK-India FTA: British firms see deal as a ‘game-changer’; ramp up expansion plans

Several UK businesses are viewing the India-UK Free Trade Agreement (FTA) as a “game-changer”, accelerating expansion plans and prompting many firms without a presence in India to enter the market, according to a new report by Grant Thornton.The ‘International Business Report’ (IBR) found that 72 per cent of UK firms now consider India a key market for international growth, up from 61 per cent last year. While only 28 per cent of surveyed businesses currently operate in India, 73 per cent of those without a presence plan to enter the market, including 13 per cent within the next 12 months.

“The shift we’re seeing is clear: UK mid-market businesses are no longer asking ‘why India’, they are asking ‘how soon’,” said Anuj Chande, partner and head of South Asia Business Group at Grant Thornton UK. “With 73 per cent of firms planning to establish operations in India and over half of existing players looking to scale up within a year, this is a pivotal moment. The UK-India FTA is a game-changer, reducing entry barriers and accelerating opportunity,” he added, as quoted by news agency PTI.The FTA, formally the Comprehensive Economic and Trade Agreement (CETA), signed during Prime Minister Narendra Modi’s UK visit in July, is expected to significantly strengthen the £44.1-billion bilateral trade partnership once ratified by the British Parliament. The deal is anticipated to simplify business setup, reduce operating costs, and allow smoother mobility of talent across borders, benefiting sectors such as IT, finance and consulting.According to the report, India’s appeal lies in its scale, talent and economic momentum, with 65 per cent of UK firms citing India’s fast-growing economy and 60 per cent pointing to its large consumer market as key drivers. Skilled talent remains a major draw, with 53 per cent highlighting India’s large, qualified workforce, especially for technology and professional services.Grant Thornton noted that 667 British firms already operate in India, generating £47.5 billion in revenue and employing over 516,000 people. While opportunities are significant, 63 per cent of UK businesses flagged regulation and foreign exchange controls as top barriers, with 38 per cent highlighting infrastructure gaps and the fragmented market.The report also noted mirrored momentum from Indian firms, with 99 per cent of those already in the UK planning to expand and nearly 90 per cent of firms not yet in the UK intending to establish a base.The analysis concludes that the India-UK FTA, combined with local insight and long-term partnership strategies, could reshape trade and investment flows, positioning India at the centre of UK companies’ global growth strategies.