India’s farm sector poised for gains as trade deal enhances access to UK market

The trade deal enables enhanced access to the British market for a range of Indian goods such as processed foods, vegetables, spices, marine and animal products, as import tariffs on them were either reduced or eliminated. Importantly, New Delhi managed to limit its concessions in its farm sector to a narrow segment and safeguard its domestic interests.

Without opening up its agriculture sector in a big way, New Delhi made selective concessions on items like lamb meat, seafood and some live breeding animals, but core sensitive sectors like dairy, bovine meat, poultry, and processed animal products are excluded. The move suggests India managed to protect key parts of its agricultural market in the trade deal.

High-value British exports such as spirits, lamb meat, and seafoods like salmon, mackerel and trout will get cheaper for Indian consumers, after New Delhi eliminated import tax on these goods.

Big gains for processed foods

Under the trade deal, India will get duty-free access to the UK market for several agricultural commodities. In the processed food sector, products that earlier faced import taxes as high as 70% will now enjoy zero duty on 99.7% of tariff lines. 

India exported agricultural products worth about $785 million to the UK in FY25.

Also, goods that earlier attracted duties of up to 20% will enjoy zero duty, benefiting exporters of edible oil, oil seeds derivatives and other plant-based commodities. This will also support exports of tea, coffee, spices, fruits and vegetables, which are vital to India’s agri-processing sector and rural economy. In FY25, India exported $22.77 million worth of edible oils to the UK while importing just $1.35 million.

The elimination of tariffs would put India’s exports of fruit, vegetables and cereals to the UK on par with exporters of Germany, Netherlands and other European Union countries.

Marine products get a boost

Also, for marine and animal products, tariffs of up to 20% have been reduced to zero. Exporters of seafood, dairy, and meat products stand to benefit significantly. This will benefit the fisheries sector, especially in coastal states such as Andhra Pradesh, Odisha, Kerala, and Tamil Nadu as they can have larger access to UK’s $5.4 billion marine import market.

The trade deal with the UK will open up a new market for India in the seafood sector by providing a level-playing field with other exporting countries. This is significant as it comes at a time when the sector is facing headwinds in its largest market – the US, said K.N. Raghavan, secretary general, Seafood Exporters Association of India.

“The signing of the trade agreement provides scope for increasing the exports of seafood to the UK. It is estimated that this may go up to $180-200 million during the coming year,” Raghavan added.

India’s seafood exports to the UK in FY25 were worth $104 million, dominated by shipments of frozen shrimp/prawns, with imports totalling $2 million.

Selective tariff cuts

India’s market access commitments under the deal are targeted and strategic, as per the schedule of tariff pledges made by New Delhi, the deal document showed. These concessions to the UK cover high-value British exports like cars as well as spirits, seafood and lamb and selective industrial goods. For example, lamb carcasses, a premium export from UK, will be exempt from import duty by India as the agreement comes into force, but there is no duty reduction commitment on import of goat carcasses, a more mass-use product in India.

The 5.5% import duty on sheep and lamb for breeding purposes will only be reduced by half over ten years.

The deal document shows that there is selective opening up on seafoods like fresh, chilled and frozen or preserved fish species such as salmon, mackerel and trout. Duty-free import of these will be allowed. There is also selective and partial opening up of pure-bred breeding animals like horses, but not on exotic livestock.

India has made no commitment to lower import duty on milk, butter, cheese, meat and edible offal. Major sectors like agriculture, dairy, and poultry remain protected.

Win for agri exports

In balance, the India-UK deal is expected to have a significant positive impact on the Indian agricultural and processed food sector, with exports of agricultural and processed food products likely to rise by over 50% in the next three years, a government official said.

“The India–UK FTA marks a watershed moment in the partnership between the two nations,” Anant Goenka, senior vice-president of industry body Federation of Indian Chambers of Commerce and Industry (FICCI), said.

“The agreement holds significant importance for businesses and will provide enhanced market access along with greater certainty for Indian exporters,” Goenka added.