Recent developments across UK–India trade, outbound Indian investment and domestic policy initiatives highlight a maturing market environment that is increasingly integrated into global economic systems and positioned for sustained long‑term growth.
UK-India trade relations and economic integration
The UK–India Free Trade Agreement (FTA), due to enter into force on 15 July 2026, represents a significant milestone in the bilateral relationship, reinforcing both countries’ commitment to strengthening long-term economic cooperation. The agreement is intended to enhance the efficiency and accessibility of cross-border trade by simplifying regulatory processes, introducing greater use of digital customs procedures and improving overall ease of doing business between the two markets.
Bilateral trade between the UK and India is already substantial, estimated at approximately £48 billion annually, and is forecast to increase by around £25.5 billion per year over the longer term, reflecting strong expected uptake by businesses and deeper market integration. A central component of the FTA is extensive tariff liberalisation, with the UK removing tariffs on 99% of Indian goods and India reducing tariffs on 90% of UK exports, lowering costs for importers and exporters across both jurisdictions.
The agreement also introduces important structural elements, including simplified customs procedures, greater regulatory clarity and provisions relating to government procurement and social security coordination. These measures are expected to reduce administrative burdens, strengthen supply chains and increase overall competitiveness, while encouraging businesses to expand into each other’s markets and deepen cross-sector collaboration.
Indian investment trends in the United Kingdom
Alongside strengthening trade ties, Indian investment into the UK has reached record levels, reflecting sustained confidence in the UK as a long-term destination for capital. The number of Indian-owned companies operating in the UK has increased by nearly 60% year-on-year to 1,912, representing the highest level recorded, with combined turnover rising to approximately £105.77 billion.
Dhruv Chhatralia BEM, Head of the DWF India Group, says: “We are seeing a lot of interest from Indian companies looking to establish or expand their presence in the UK. For many, the UK remains the natural gateway into Europe and a highly attractive jurisdiction for investment, acquisitions, fundraising and international growth. While the opportunities in the UK market are significant, successful expansion requires careful planning around regulation, governance, employment, tax and commercial strategy. Businesses that invest time in getting the foundations right are typically best positioned for long-term success”.
This growth has been accompanied by a significant expansion in employment, with workforce numbers increasing from 126,720 to 203,549, underlining the growing economic contribution of Indian businesses across the UK. Notably, 26% of these companies are new entrants, highlighting continued market entry despite broader challenges such as geopolitical uncertainty, rising costs and more restrictive immigration frameworks.
While London remains a key hub for Indian businesses, its relative dominance is gradually declining as investment becomes more geographically diversified. London currently accounts for 38% of Indian-owned companies, with increased presence across the South of England (27%), the Midlands (12%) and the North (11%). Sectorally, technology, media and telecommunications continue to lead, alongside growing activity in manufacturing and pharmaceuticals, reflecting a broadening investment base and a more distributed footprint across the UK economy.
Policy measures and strategic sector development
At a domestic level, India is continuing to implement targeted measures to attract foreign capital and strengthen key sectors of its economy. In June 2026, the Reserve Bank of India (RBI) introduced a series of initiatives aimed at increasing foreign investment inflows, including expanding the Fully Accessible Route to provide foreign investors with unrestricted access to certain long-dated government bonds and easing a number of investment restrictions.
Additional measures include the introduction of concessional foreign exchange swap facilities designed to reduce currency risk, increased investment limits for non-resident investors and the removal of certain tax barriers on government securities. Together, these changes are intended to lower the cost of capital inflows, broaden access to India’s debt markets and enhance overall investor participation.
In parallel, developments in the energy sector highlight a broader focus on industrial capability and supply chain resilience. The launch of India’s first Wind Turbine Supply Chain Management portal (WT‑MARUT) provides a digital platform to improve visibility, supplier discovery and compliance across the wind energy ecosystem. The initiative is designed to support domestic manufacturing, reduce reliance on imported components and enhance collaboration between manufacturers, suppliers and policymakers, while also strengthening export readiness and contributing to India’s clean energy ambitions.
About us
DWF is a leading legal adviser to Indian and India-focused companies, financial institutions and high-net-worth individuals and families. Our India Group, consisting of 108 lawyers from 9 countries, 16 practice areas and 9 sector groups, is the largest India group of any international law firm located outside India.
Dhruv Chhatralia BEM, the Head of the DWF India Group, was named to the India Business Law Journal’s International A-List 2024 featuring the world’s top-tier international lawyers outside India, based on recommendations by general counsels and lawyers at Indian law firms, for his work on cross-border aspects of India-related matters. DWF was ranked as an International Firm to Watch by the IBLJ in 2025. DWF was also shortlisted for the award of “Legal Practice of the Year” at the 6th Annual UK-India Awards in 2024 based on the achievements of the DWF India Group.
