Tata Motors, TVS Motor, United Spirits, Radico Khaitan, Gokaldas Exports: Top stocks and sectors to benefit from India-UK trade deal

The British government said the deal was the "biggest and most economically significant" trade agreement the UK had signed since leaving the European Union in 2020.

Indian exports such as textiles, leather, footwear, and processed foods will attract nil duty in the UK under the free trade agreement between the two countries, offering a major boost to labour-intensive sectors.

The deal between the two nations is aimed at doubling the trade between the two economies to $120 billion by 2030.

Indian goods that will enter the UK at zero duty include minerals, chemicals, gems and jewellery, plastic, rubber, wood, paper, textile, clothing, glass, ceramic, base metals, mechanical and electrical machinery, arms/ammunition, transport/auto, furniture, sports goods, animal products, and processed food.

These goods at present attract import duty in the range of 2-18%.

Meanwhile, tariffs on automotive imports will go from over 100% to 10% under quotas on both sides. This includes the crucial auto components industry as well. This will benefit companies such as TVS Motor Company, and Tata Motors-JLR, among others.

"The FTA provides positive impact on manufacturing across labour and technology intensive sectors and opens up export opportunities for sectors such as textiles, marine products, leather, footwear, sports goods and toys, gems and jewellery and other important sectors such as engineering goods, auto parts and engines and organic chemicals. This will substantially improve Indian goods competitiveness in the UK vis-a-vis other countries," India's Ministry of Commerce & Industry said.

Hailing the deal, TVS Motor Company, the leading two and three wheeler manufacturer, said that the successful conclusion of the India-UK Free Trade Agreement, along with the double contribution convention, marks a 'significant milestone' and creates large opportunities for Indian companies to access new markets.

The FTA between the two countries would help our British brand 'Norton' to scale faster, TVS Motor Company Managing Director Sudarshan Venu said.

"Our British brand 'Norton' will launch later this year and this agreement will help us scale faster and leverage common supply chains. We are excited as we further progress towards Viksit Bharat," Venu added.

“This landmark pact opens a new chapter for bilateral trade and investment, and is a significant step toward deepening economic ties between the two nations,” Shradha Suri Marwah, president of Automotive Component Manufacturers Association of India, said in a statement.

The reduction in tariff will benefit Tata Motors-JLR.

Besides, auto ancillary stocks such as Bharat Forge, Motherson Sumi Wiring, Bosch India, Endurance Technologies, Sundram Fasteners, also stand to benefit.

Textiles and apparels

In an interaction with CNBC-TV18, S Ganapathi, Vice Chairman and Managing Director of Gokaldas Exports, said the UK-India trade deal will help the company compete more effectively with Bangladesh. He expects the full benefits of the UK FTA to materialise by FY27, and believes the UK’s contribution to revenue, which currently stands at 5%, could potentially double going forward.

Alcoholic beverages

Companies such as Radico Khaitan, and United Spirits will benefit from the trade deal.

Following the trade deal, Praveen Someshwar, Managing Director & Chief Executive Officer of United Spirits Limited, said, “We welcome the historic agreement between UK & India. Our congratulations to Prime Minister Modi and Prime Minister Starmer. The landmark treaty will enable improved accessibility and choice of scotch for the Indian consumers, the largest and most exciting whisky market.”

In an interview with CNBC-TV18, Abhishek Khaitan, the managing director of Radico Khaitan, said that the duty cut would straight away lead to savings on bulk scotch imports. "We export Rampur and Jaisalmer brands to the United Kingdom. Do not see a need to change pricing strategy due to India-UK FTA," Khaitan added.

Gems and Jewellery companies

Top gainers include Titan Company (Tanishq), Vaibhav Global, Rajesh Exports, Kalyan Jewellers.

IT/ITeS

Top gainers include tier-1 IT services companies such as Infosys, TCS, Tech Mahindra, HCL Technologies, Wipro.