The recently finalized India-UK Free Trade Agreement (FTA) is poised to reshape the aluminium trade landscape between the two nations. It is expected to significantly enhance India’s export potential while strengthening bilateral relations and fostering economic growth.

Key Impacts on Aluminium Exports

The FTA’s most notable outcome is its potential to triple India’s aluminium exports to the UK by 2030, a sharp rise from the current 21 kilotonnes per annum (KTPA). The current export value stands at $93 million, and this surge could substantially increase revenue for Indian exporters.

Another transformative measure is the removal of the UK’s import duties on aluminium, which previously ranged from 2% to 10%, giving Indian producers greater price competitiveness. However, the road ahead may not be entirely smooth. The UK plans to introduce a Carbon Border Adjustment Mechanism (CBAM) in January 2027, which could partially offset the FTA’s benefits by imposing carbon-related costs on exports.

Opportunities Beyond Trade

The agreement goes beyond tariff reductions, opening avenues for research and development (R&D) collaborations. A key focus is on utilizing aluminium by-products to extract critical minerals, aligning with global trends in sustainable resource use. The FTA also fosters stronger bilateral ties and offers expanded market access, potentially enabling Indian businesses to diversify their export base.

Key Data on India-UK FTA and Aluminium Exports

Aspect	Current Status	Future/Impact
Aluminium Export Volume	21 KTPA	Projected to triple by 2030
Export Value	$93 million	Expected to rise significantly
UK Import Duties	2%–10%	Eliminated under FTA
Carbon Border Adjustment Mechanism	Not applicable	To be introduced in January 2027 (may pose risk)
R&D and Critical Minerals	Limited collaboration	Expanded opportunities under the FTA
Bilateral Trade Relations	Existing trade ties	Strengthened through FTA
Market Access	Limited	Broader UK market entry for Indian businesses

Outlook

The India-UK FTA represents a landmark opportunity for India’s aluminium industry. While challenges such as the upcoming CBAM could temper the gains, the overall trajectory is strongly positive. Increased exports, duty-free access, and collaborative R&D efforts position India as a key player in the UK’s aluminium supply chain and create avenues for economic growth and innovation.