India and the United Kingdom have recently signed a Free Trade Agreement (FTA) that boosts confidence in India’s startup industry. Ritesh Agarwal, the founder of Oyo, called this partnership a “game-changer.” This agreement is expected to enhance international cooperation, attract investment, and promote growth in exports.

Startup Leaders See New Avenues for Growth

Speaking on the agreement, Ritesh Agarwal said the FTA would “open up fresh avenues for funding, cross-border expansion, and technology exchange,” especially for startups in sectors like hospitality, mobility, and tech platforms.

This deal takes place at a time when Indian entrepreneurs are actively looking for scalability in foreign markets. The UK, which already has a sizable Indian community and a welcoming investment environment, may now be a more accessible launchpad for startups and expansion companies.

Government Push for Tamil Nadu Startups and MSMEs

Prime Minister Narendra Modi highlighted to an audience in Tamil Nadu that 99% of Indian exports to the UK will now be tax-free, which will help startups and MSMEs in the state, which is well-known for its leather, textile, and auto component sectors.

According to official estimates, this FTA could reduce tariffs on over 11,500 products, giving Indian exporters a major edge in the UK market. For startups and MSMEs in manufacturing, agritech, and clean energy, this means faster access to buyers and partners in one of Europe’s wealthiest economies.

Why This Matters for Indian Startups

As of July 2025, India has over 180,000 startups recognized by DPIIT. Many of these companies, especially in SaaS, fintech, electric vehicles, and health technology, can benefit from easier regulations and better access to UK investment and customers.

The Free Trade Agreement (FTA) aims to protect intellectual property rights, support digital trade, and ensure data protection. This helps create a safer environment for India’s innovative companies to operate in the global market.

While we can’t predict the long-term effects yet, the India-UK FTA lays the groundwork for Indian startups to grow internationally. As both governments work on implementing the agreement, founders and small businesses in India will pay close attention and plan their next steps across the border.

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