BPF highlights opportunities for plastics companies after recent FTA with India

The British Plastics Federation (BPF) has suggested the recent free trade agreement (FTA) with India, announced on 6 May 2025, could benefit the UK plastics industry. Although there are still certain details to be clarified, the trade association argues there are opportunities for growth that UK plastics companies should be aware of.

Although the negotiations have concluded, the UK and India are now finalising the legal text of the free trade agreement and a legally binding treaty. After both the UK and India have completed their respective ratification processes, a Double Contributions Convention (DCC) will come into force too, which was negotiated concurrently. The DCC is designed to stop employees having to pay social security in multiple countries if staff move between the India and the UK, permitting “temporary” employment in either country for up to three years.[1]

At that point, 64% of tariff lines will be eligible for tariff-free export to India. Further tariff reductions will be phased in over 10 years, rising from a £400 million to a £900 million reduction, ultimately covering 85% of tariff lines. British producers and manufacturers will be permitted to source some ingredients and materials from other countries and export the finished product to India. By contrast, 66% of existing Indian imports from the UK will be eligible for tariff-free entry.[2]

It has been reported in Indian trade press that the UK’s Carbon Border Adjustment Mechanism (CBAM), which intends to impose levies on high-carbon imports from 2027, remains a potential concern for some Indian companies. To try to avoid any disadvantage to Indian chemicals companies, India has proposed a compensation-based “rebalancing mechanism”.[3] The details behind this are still unknown.

India accounted for 2.0% of all UK exports in 2024 and was the UK’s 12th largest export market. India was the 11th largest source of UK imports.[4] The UK exported £7.0 billion of goods to India in 2024 but imported £10.8 billion, so has a £3.8 billion deficit on trade in goods.[5] These pre-established trade links are understandably expected to grow in light of the FTA, with the UK’s Department for Business and Trade (DBT) estimating UK GDP will be £4.8 billion higher per year by 2040 as a result, with UK exports to India estimated to increase by £15.7 billion.[6]

A recent survey by Grant Thornton found that 42% of UK businesses without a presence in India planned to build one over the next two years. 96% of businesses with a pre-existing presence in India planned to expand it.[7] The same survey found that 73% of UK businesses felt an FTA would encourage them to explore opportunities in the Indian market.[8]

India is a tantalising market for plastics companies. By headcount, it is the world’s largest democracy and is expected to have 20% of the world’s working population by 2030.[9] In 2024, the UK exported $142 million of plastic and plastic-related products to India, $43 million of which was raw material, nearly $88 million were plastic products and $13 million was machinery.[10]

The largest plastics tradeshow in India is called PlastIndia, which takes place every three years. In 2023, the five-day exhibition had 1,800 exhibitors and 360,000 visitors.[11] The next edition of the show takes place in February 2026 and the BPF is hosting a British Pavilion, featuring companies from across the plastics supply chain. UK companies interested in exploring the Indian market can find out more about exhibiting at PlastIndia as part of the British Pavilion on the BPF website. A webinar for BPF members called Opportunities in the Indian Plastics Market is also being held on 23 May.

BPF Director General Philip Law states:

UK plastics companies are some of the best in the world. For the UK to thrive it is vital we cement our place on the world stage. The free trade agreement with India is a very positive step with a country we have been trading with profitably for decades. It is a fascinating market that is clearly expected to grow on the back of this agreement. We have been in dialogue with the Department for Business and Trade during the negotiation process and we hope, as the details emerge, there will be clear opportunities for the whole plastics supply chain to grow their exports to India or benefit in other ways from increased trade between our nations.

The FTA with India is the UK’s fourth trade agreement since Brexit, following those negotiated with Australia, New Zealand and formally joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Find out more about exhibiting at Plastindia 2026

Sources

[1] DBT, UK-India trade deal: conclusion summary: www.gov.uk/government/publications/uk-india-trade-deal-conclusion-summary/uk-india-trade-deal-conclusion-summary

[2] DBT, UK-India trade deal: conclusion summary: www.gov.uk/government/publications/uk-india-trade-deal-conclusion-summary/uk-india-trade-deal-conclusion-summary

[3] Indian Chemical News, Impact of the UK-India FTA on Indian chemical industry: www.indianchemicalnews.com/regulatory/impact-of-the-uk-india-fta-on-indian-chemical-industry-26116

[4] DBT, Trade and Investment Factsheet, India: https://assets.publishing.service.gov.uk/media/681384a770b095d0d701185d/india-trade-and-investment-factsheet-2025-05-02.pdf

[5] HoC Library, Research briefing, UK-India Free Trade Agreement: https://commonslibrary.parliament.uk/research-briefings/cbp-10258

[6] HoC Library, Research briefing, UK-India Free Trade Agreement: https://commonslibrary.parliament.uk/research-briefings/cbp-10258

[7] DBT, UK-India trade deal: conclusion summary: www.gov.uk/government/publications/uk-india-trade-deal-conclusion-summary/uk-india-trade-deal-conclusion-summary

[8] Grant Thornton, UK and India trade: businesses see benefits – and potential barriers: www.grantthornton.co.uk/insights/uk-and-india-trade-businesses-see-benefits-and-potential-barriers

[9] PlastIndia, Plastic Industry Status Report (2023): https://plastindia.org/publications-industries-status

[10] UN Comtrade Database (‘all plastic’ uses code 39, ‘raw material’ uses codes 3901-3914, ‘products’ uses codes 3916-3926, ‘machinery’ uses code 8477): https://comtradeplus.un.org

[11] PlastIndia 2023 post-show report: https://plastindia.org/show-info-download-centre