India-UK FTA: A Boost for Engineering Exports and Economic Ties

The Engineering Export Promotion Council of India (EEPC) has praised the recent signing of the India-UK Free Trade Agreement (FTA) as a transformative step, aiming to significantly enhance India's engineering exports and create a more robust economic relationship between the two nations. In 2024-25, the UK, already India's sixth-leading engineering export destination, witnessed an impressive 11.7% increase in trade, according to EEPC's statement.

Despite current progress, EEPC notes that India's engineering exports to the UK amount to just USD 4.28 billion, a mere 2.2% of the UK's vast USD 193.52 billion engineering import market. The FTA's removal of tariffs, which previously crested at 18% on essential engineering products, is poised to stimulate export growth, per EEPC India's official release.

Projections indicate that engineering exports to the UK could soar to over USD 7.5 billion by 2029-30. Segments such as electric machinery, auto components, industrial equipment, and construction machinery are expected to flourish with growth rates of 12-20%, empowered by enhanced market access and simplified trade processes.

The agreement is anticipated to particularly aid Indian small and medium-sized enterprises (MSMEs) by lowering entry barriers and increasing competitiveness within the UK market. This strategic alignment also coheres with India's ambition of reaching USD 250 billion in engineering exports by 2030, positioning the UK as a vital partner.

EEPC India's Chairman, Pankaj Chadha, heralded the FTA as a pivotal and timely breakthrough that will invigorate India's engineering sector, nurturing new opportunities for exporters, especially MSMEs, while cementing India's role in global value chains. Commending both governments, Chadha affirmed the agreement's bolstering of technological alliances and innovation.

Adhip Mitra, EEPC India's Executive Director, emphasized that the agreement transcends mere trade, gearing towards transformation by promoting technology partnerships and sustainable growth in engineering exports. At a juncture marked by global trade uncertainties, EEPC India underscores this Comprehensive Economic and Trade Agreement (CETA) as a historic achievement.

This FTA, being one of the most encompassing trade agreements with a developed nation, could serve as a prototype for future trade deals, promoting collaboration among manufacturers underpinned by technology and innovation.

(With inputs from agencies.)