techUK news and views
25 Jul 2025

UK–India Free Trade Agreement: What It Means for the UK Tech Sector

After more than three and a half years of negotiations, the UK–India Free Trade Agreement (FTA) was signed on 24 July 2025. It marks a major step forward for India’s trade policy - its most ambitious bilateral deal to date - and is a significant geopolitical signal for the UK as well.

For India, this FTA represents an important evolution. It includes provisions on digital trade, services, public procurement, and innovation that go beyond its prior commitments in trade agreements. For the UK, it opens access to one of the world’s fastest-growing economies, home to a vibrant digital sector and a deep talent pool.

However, when compared to the UK’s own trade policy precedent - established in recent FTAs with Australia, New Zealand, Singapore and Japan - this deal presents a mixed picture for the UK’s technology sector. Some areas meet or mirror UK standards. Others fall short in terms of ambition, legal enforceability, and liberalisation. That should not however come as a surprise as India’s domestic digital policy has traditionally veered towards protectionism.

As techUK CEO Julian David put it:

“techUK welcomes the signing of the UK-India Free Trade Agreement as a pivotal step in strengthening commercial ties between our two thriving technology sectors. The agreement provides a valuable foundation for deepening digital trade, supporting innovation, and unlocking new market opportunities for UK tech businesses. Together with the Comprehensive and Strategic Partnership and the Tech Security Initiative, these agreements reflect the strategic importance of trusted international cooperation in building secure and resilient technology ecosystems. The success of these initiatives will ultimately lie in their implementation, and techUK looks forward to working closely with government to help our members seize the opportunities they create."

What the Agreement Means for UK Tech

1. Digital Trade (Chapter 12)

✅ What’s Good

  • Recognises the legal validity of electronic contracts, e-signatures, and open government data.
  • Critically, Article 12.7 provides explicit protections for source code and algorithms, stating: “Neither Party shall require the transfer of, or access to, source code of software or algorithms expressed in that source code, owned by a person of the other Party, as a condition for the import, distribution, sale or use of that software...”
  • This matches the UK's precedent standard and aligns with modern digital trade norms.

❌ Where It Falls Short

  • No binding commitment to free cross-border data flows.
  • No prohibition on data localisation requirements.
  • No commitment to the moratorium on customs duties for electronic transmissions (e.g. downloads, streaming, SaaS).

2. Trade in Services & Mobility (Chapters 8 and 10)

✅ What’s Good

  • Provides increased market access to UK services.
  • Commitments on temporary movement of professionals (e.g. business visitors, intra-corporate transferees).
  • Framework for future mutual recognition of professional qualifications.

❌ Limitations

  • India retains sectoral restrictions and licensing requirements, particularly in IT and digital services.
  • Less comprehensive than UK’s negative list approach used in other FTAs.

3. Innovation Cooperation (Chapter 14)

✅ What’s Good

  • Establishes a cooperation framework on emerging technologies, digital skills, R&D, and start-ups.
  • Recognises the role of innovation in driving economic development and trade.

❌ Limitations

  • No binding commitments or structured mechanisms (e.g. Strategic Innovation Dialogue, deliverables, timelines).
  • Innovation chapter is cooperative in tone, but non-enforceable and lacks institutional follow-through.

4. Telecommunications (Chapter 11)

✅ What’s Good

  • Provisions for non-discriminatory access, licensing transparency, and interconnection rights.
  • Encourages independent regulation and reasonable access to telecom networks.

❌ Limitations

  • Contains broad exceptions for public policy and security.
  • Does not guarantee competitive access or transparent pricing in the way UK precedent texts do.

5. Intellectual Property (Chapter 13)

✅ What’s Good

  • Confirms adherence to TRIPS standards.
  • Includes general protections for copyright, patents, trademarks, and enforcement cooperation.

❌ Limitations

  • No significant reform to Indian IP enforcement or patent systems relevant to UK tech firms.

6. Government Procurement (Chapter 16)

✅ What’s Good

  • India commits - for the first time in a bilateral FTA of this scope - to opening parts of its central government procurement market to a foreign partner.
  • Includes obligations on transparency, non-discrimination, and fair treatment for UK suppliers.

❌ Limitations

  • Many strategic sectors and sub-national entities are excluded.
  • Practical access may be limited by local content requirements, procedures, or bureaucratic barriers.

 7. Regulatory Cooperation (Chapters 24–25)

✅ What’s Good

  • Commits both sides to Good Regulatory Practices: transparency, stakeholder engagement, publication of regulations.
  • Supports regulatory alignment over time.

Conclusion

The UK–India FTA is a landmark diplomatic success, particularly in getting India to open up its procurement market and acknowledge the strategic role of digital and innovation policy in economic growth.

But for UK tech businesses, the deal is foundational, not transformational. It lacks binding commitments on data flows, localisation, and enforceability in digital trade - elements that are core to the UK’s modern FTA model.

Still, it creates an institutional framework for progress and it is the right signal in an increasingly fragmented global digital market. If both sides invest in implementation - via working groups, digital dialogues, and innovation policy convergence - this FTA can become the launchpad for deeper, future-facing tech cooperation.

For more information, please contact:

Sabina Ciofu

Sabina Ciofu

Associate Director – International, techUK

Sabina Ciofu is Associate Director – International, running the International Policy and Trade Programme at techUK.

Based in Brussels, she leads our EU policy and engagement. She is also our lead on international trade policy, with a focus on digital trade chapter in FTAs, regulatory cooperation as well as broader engagement with the G7, G20, WTO and OECD.

As a transatlanticist at heart, Sabina is a GMF Marshall Memorial fellow and issue-lead on the EU-US Trade and Technology Council, within DigitalEurope.

Previously, she worked as Policy Advisor to a Member of the European Parliament for almost a decade, where she specialised in tech regulation, international trade and EU-US relations.

Sabina loves building communities and bringing people together. She is the founder of the Gentlewomen’s Club and co-organiser of the Young Professionals in Digital Policy. Previously, as a member of the World Economic Forum’s Global Shapers Community, she led several youth civic engagement and gender equality projects.

She sits on the Advisory Board of the University College London European Institute, Café Transatlantique, a network of women in transatlantic technology policy and The Nine, Brussels’ first members-only club designed for women.

Sabina holds an MA in War Studies from King’s College London and a BA in Classics from the University of Cambridge.

Email:
[email protected]
Phone:
+32 473 323 280
Website:
www.techuk.org

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Sabina Ciofu

Sabina Ciofu

Associate Director – International, techUK

Daniel Clarke

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Policy Manager for International Policy and Trade, techUK

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