UK-India Free Trade Agreement Set to Unlock Billions in Bilateral Trade

A New Era for UK-India Trade

On May 6th 2025, the UK and India signed a landmark Free Trade Agreement (FTA) - a move predicted to add as much as GBP 4.8 billion to the UK economy and boost bilateral trade by GBP 25.5 billion. For cross-border investors and mid-market acquirers, the implications are immediate.

The new FTA reduces tariffs on 90% of UK goods entering India, while 99% of Indian exports to the UK will now enjoy near-duty-free access. That includes high-impact sectors such as IT, Pharmaceuticals, Auto Parts, Textiles, and more - all primed for deal activity.

M&A Momentum Rising Across Sectors

This isn’t just a policy win- it’s a structural shake-up for bilateral trade and mid-market M&A. As barriers come down, so do the costs of entry, accelerating deal strategies in both directions:

➤ From the UK into India: M&A as a lever for manufacturing scale, market penetration, and access to diverse talent pools

Sector focus: Advanced Manufacturing, Cleantech, and Specialized Services

➤From India into the UK: Acquisitions to secure market presence, cutting-edge technology, and established branding

Sector focus: Pharma & Medtech, Consumer Goods, and Digital Tech

Four Strategic Drivers for M&A

The UK-India FTA is not just opening markets—it’s fueling smart cross-border investment. IMAP UK highlights four key drivers for M&A in the new trade landscape:

• Market Access Acceleration

Use acquisitions to bypass setup time and tap instantly into the partner country’s customer base

• Supply Chain Optimization

M&A deals now support more resilient and cost-effective supply chains, especially with newly reduced tariffs

• Tech & Innovation Grab

Secure valuable intellectual property, talent, and R&D ecosystems by acquiring high-growth innovators

• Sector Synergies Unleashed

With FTA-driven growth, expect consolidation waves across sectors where margins and scalability are enhanced

Private Equity Interest on the Rise

Private equity firms are already eyeing this new landscape. With a rise in regulatory clarity and enhanced access to high-growth sectors, expect a surge in platform investments - especially in cross-border contexts where the FTA simplifies compliance and tariffs.

For tailored insights and M&A support related to the UK-India Free Trade Agreement, contact the IMAP UK and IMAP India teams.