LONDON – A significant surge in UK businesses accelerating their expansion plans into India is being fueled by the imminent finalization of the India-UK Comprehensive Economic and Trade Agreement (CETA), according to a new report. This strategic shift signals India’s ascendance as a pivotal growth market for the United Kingdom’s economy, with firms eager to capitalize on enhanced market access and reduced trade barriers.
The India-UK FTA: A Catalyst for Growth
The India-UK Comprehensive Economic and Trade Agreement (CETA), formally signed on July 24, 2025, is anticipated to significantly bolster the £44.1 billion bilateral trading partnership once ratified by the British Parliament. This landmark deal is designed to simplify market entry, lower operating costs, and facilitate greater talent mobility between the two nations. Industry sentiment is overwhelmingly positive, with a substantial 79% of surveyed UK businesses agreeing that Free Trade Agreements (FTAs) effectively encourage investment and promote growth.
India’s Ascending Appeal for UK Enterprises
Grant Thornton’s latest International Business Report (IBR) reveals a marked increase in UK firms viewing India as a prime destination for international growth. This year, 72% of UK businesses identify India as a key market, a notable rise from 61% in the previous year. This trend underscores India’s “shift to the centre of global strategy conversations.” Anuj Chande, Partner and Head of South Asia Business Group at Grant Thornton UK, observed, “The shift we’re seeing is clear: UK mid-market businesses are no longer asking ‘why India’, they are asking ‘how soon’. The UK-India FTA is a game-changer, reducing entry barriers and accelerating opportunity.”
The allure of India for UK companies is multifaceted, driven by its dynamic economic landscape. A significant 65% of British firms cite India’s fast-growing economy as a primary attraction, complemented by its vast consumer market, which is pointed to by 60% of businesses. Furthermore, India’s substantial and highly qualified workforce, particularly in technology and professional services, is a key draw for 53% of UK firms.
Accelerating Market Entry and Scaled Operations
The impact of the CETA is evident in the ambitious expansion strategies of UK companies. While only 28% of surveyed businesses currently have operations in India, an impressive 73% of those without a presence plan to enter the market. Crucially, 13% of these firms are looking to establish operations within the next 12 months, with broader plans seeing 42% of non-present UK businesses intending to enter within two years. For those already operating in India, the sentiment is overwhelmingly geared towards expansion, with 95-96% planning to scale up their existing operations, over half of whom aim to do so within the next year. This robust business news reflects a proactive approach to leveraging the new trade agreement.
Key Sectors and Existing UK Presence
The benefits of the India-UK CETA are expected to be particularly pronounced in sectors such as IT, finance, consulting, advanced manufacturing, clean energy, creative industries, life sciences, and professional and business services. These sectors are well-positioned to leverage the agreement’s provisions for simplified business setup, reduced operational costs, and enhanced talent mobility.
The United Kingdom already boasts a significant footprint in India, with an estimated 667 British firms generating £47.5 billion in revenue and employing over 516,000 people. Companies like Radio Design, Marcus Evans Group, Appliansys, Microfresh, Novocuris, and Biocomposites are among those expanding their operations, contributing to this growing economic interdependence.
Navigating Opportunities and Challenges
The CETA promises to significantly lower trade and investment frictions, thereby simplifying business setup and reducing costs. The UK government estimates that the FTA could boost UK GDP by £4.8 billion and increase bilateral trade by £25.5 billion annually in the long run. However, challenges remain. A majority of UK businesses (63%) cite regulatory complexity and foreign exchange controls as key barriers, while 38% point to infrastructure gaps and market fragmentation. Despite these hurdles, the overarching sentiment is one of optimism and strategic foresight as businesses prepare to harness the opportunities presented by a deepening economic partnership between the United Kingdom and India.
As the CETA moves towards ratification, the trend of UK businesses accelerating their India expansion is set to continue, marking a new era of bilateral trade and investment growth.
