Trade, Trust and Transformation: What India’s FTAs Mean for Responsible Business

India’s new free trade agreements (FTAs) with the UK and the European Union signal a significant shift in how global companies will engage with the world’s fastest‑growing major economy. These deals not only expand market access but also place sustainability and responsible business at the centre of future trade relationships. 

Senior Consultant Gurdeep Mall explains what the agreements mean, why they matter for UK and EU companies, and how businesses can prepare to grow responsibly in India.  

India is driving a new chapter in global trade through two FTAs with the UK and the European Union. These FTAs promise deeper partnerships, wider economic opportunity and the chance to shape growth that delivers real benefits for people and communities.  

Crucially, the FTAs signal that sustainability and responsible business are priorities for India, the EU and the UK. They mark a departure from earlier dynamics where sustainability could feel externally driven or disconnected from day-to-day realities in India. With a shared sustainability framework and partnership ethos built into the agreements, they open the door to meaningful engagement with Indian business partners that will drive inclusive growth. 

A new generation of FTAs reshaping India’s global role 

The UK-India Free Trade Agreement - expected to enter into force in the first half of 2026 - reduces Indian tariffs on key UK exports such as whisky and automotives, while eliminating tariffs on most Indian goods entering the UK. The FTA will expand market access across goods, services and mobility provisions. 

Meanwhile, days into 2026, the European Union and India concluded negotiations on a landmark trade agreement, the largest such deal ever concluded by either party. The European Commission’s announcement highlights tariff elimination and reduction on over 90% of goods and upgraded access to the Indian services market, including key sectors such as financial services and maritime transport. 

Responsible business at the heart of new trade relationships  

Alongside market provisions, the agreements set out the shared priorities that will guide the partnerships in years to come.  

The EU-India agreement embeds sustainability through a dedicated Trade and Sustainable Development chapter, which commits both parties to cooperation around labour rights, environmental protection and climate action. It establishes formal platforms where the EU and India can review implementation, exchange technical expertise and coordinate on these topics, ensuring commitments translate into ongoing joint work. 

These FTA commitments sit within a broader EU regulatory landscape that makes Human Rights and Environmental Due Diligence (HREDD) mandatory:  

• The Corporate Sustainability Due Diligence Directive (CSDDD) requires in-scope companies to identify and address adverse human rights and environmental impacts across their global operations and value chains.  

• The Corporate Sustainability Reporting Directive (CSRD) requires detailed value-chain disclosures on human rights and environmental impacts in the supply chain.  

• The EU Forced Labour Regulation will prohibit goods made with forced labour from entering the EU market.  

• The EU Deforestation Regulation (EUDR) will require supply chain traceability and evidence that forest-risk commodities entering the EU market are deforestation-free.  

The UK-India agreement recognises sustainability as a shared priority, emphasising cooperation on labour and environmental issues alongside inclusive development and clean growth. While less detailed than the EU agreement, the UK FTA signals an intention for both countries to work together on responsible business practices as they seek to deepen their trade partnership. 

As barriers to trade fall, UK and EU companies must reinforce their growth in India with robust HREDD, identifying where labour, environmental or deforestation risks are most acute and addressing them proactively.  

Turning growth into positive impact: how companies can unlock value in India through meaningful HREDD 

When growth is informed by a deep understanding of rightsholders’ perspectives, businesses make better decisions: procurement terms align with decent work, grievance mechanisms surface issues early and remediation strengthens relationships with the people and communities that uphold supply chains.

In practice, here’s where you can start:  

Map supply chains to understand where the risks are 

A clear picture of the supply chain - especially beyond direct, tier-one suppliers - helps companies identify hotspots for human and labour rights, environmental and deforestation risks. This lays the foundation for risk-based and rightsholder-centred responses.  

Conduct supply chain impact assessments (SCIAs) 

SCIAs provide structured insight into how business activities affect rightsholders like workers, farmers and communities. For companies expanding in India under new FTAs, meaningful rightsholder engagement ensures decisions are rooted in actual lived experience, not assumptions. 

Invest in supplier capability building 

Strengthening suppliers’ capacity to identify and address risks around labour rights, responsible recruitment, grievance mechanisms and environmental impacts creates more stable, credible partnerships. When suppliers feel genuine ownership of the process, their understanding of the local context becomes a powerful driver of practical, lasting improvement. 

Stress test systems through scenario-based exercises, including forced labour simulations  

Simulations enable cross-functional teams to test how well policies, escalation pathways and grievance mechanisms work under pressure, such as when a forced labour allegation arises and EU authorities request evidence. They reveal gaps, strengthen alignment and build confidence in systems. 

What’s next? 

In the coming weeks, twentyfifty will draw on our extensive experience working with businesses across India to explore the opportunities and challenges for specific sectors. 

Get in touch 

If you're interested in learning more about our work in India and how we can support you, please get in touch with Gurdeep: gurdeep.mall@twentyfifty.co.uk