In the three largest UK import sectors by value — machinery (HS84, £77.8bn), vehicles (HS87, £69.5bn), and electrical machinery (HS85, £56.5bn) — India's 2024 share remains below 5% in all three. In vehicles, India's share fell. The slope chart translates the Lords Committee's qualitative assertion that India's bilateral trade relationship represents "a systemic underperformance" into a concrete visual: this is what underperformance looks like measured across an entire import economy.
What the Data Shows That the Evidence Sessions Did Not
The Lords report's automotive evidence is instructive as a case study in the limits of qualitative evidence. Alessandro Marongiu of SMMT described the UK–India automotive relationship as holding "huge potential that is currently untapped" and noted systemic underperformance in bilateral trade. This is accurate. But the SMMT figure that anchored the committee's understanding — that 0.1% of UK-assembled car exports go to India — is an export figure. It tells you nothing about what India supplies to UK buyers.
The BACI data tells the import story. India's share of HS87 (vehicles, £69.5bn total UK imports) was 0.44% in 2019 and 0.34% in 2024 — it fell over the analysis period. The UK imports roughly £100 million of automotive parts and components from India annually (the SMMT's own figure), out of a £69.5bn chapter. Those proportions should set expectations for how quickly the FTA's automotive provisions translate into material supply-chain shifts.
Key measurement: Electrical machinery (HS85)
India's share of the UK's £56.5bn electrical machinery and electronics chapter rose from 0.61% in 2019 to 4.12% in 2024 — the largest absolute gain of any high-value chapter, and a genuine structural shift consistent with India's push into electronics manufacturing. At 4.12%, however, India still supplies around £2.3bn of a £56.5bn market. The FTA removes the formal tariff impediment to scaling further. The supply-chain infrastructure, buyer relationships, and certification regimes required to close the remaining gap are not addressed by the Agreement — they precede it.
In pharmaceuticals (HS30, £23.5bn), India rose from 1.69% to 3.08% — meaningful progress in a chapter where India is the world's largest generic manufacturer and where the FTA's fast-track mutual recognition of Good Manufacturing Practice removes a genuine non-tariff barrier. The Lords report identifies this non-tariff provision as significant. The data confirm that India's trajectory in this chapter was already upward before the deal; the FTA should accelerate it.
In machinery (HS84, £77.8bn), India's share moved from 1.21% to 1.71% over five years — a gain that barely clears statistical noise in a chapter that represents the largest single category of UK merchandise imports. The Lords Committee heard from the Resolution Foundation's Sophie Hale that "the full gains will be shown in expansion of trade flows, investment reallocation and productivity spillovers over a decade to two decades." The machinery chapter is the clearest illustration of why that timeline is not pessimistic: the structural gap is large enough that even sustained annual gains of half a percentage point would take the better part of a decade to make India a significant supplier.
The Sectors with Genuine Pre-Deal Momentum
The Lords report correctly notes that India was already an established supplier of basmati rice, spices, and black tea. More interesting for supply-chain planning is where India was already gaining ground in non-food sectors before the FTA created any new incentive structure.
Iron and steel (HS72) is the clearest case: India's sector share moved from 1.66% to 8.05% — the largest absolute gain of any chapter in the dataset, crossing the 5% significance threshold for the first time. This is a pre-FTA shift, driven by changes in UK steel import patterns following Brexit-era safeguard realignments, not by any bilateral preferential agreement. It demonstrates that India can establish significant UK market positions when logistics, pricing, and regulatory conditions align. The FTA does not change the conditions that drove this particular shift, but it provides the stable framework that the Lords Committee correctly identifies as valuable for business planning.
Ceramics (HS69) tells a similar story: from 2.45% to 7.16%, now firmly above the significance threshold. Indian ceramic manufacturing — centred on Gujarat — has undergone rapid capacity expansion since 2019. Organic chemicals (HS29) moved from 3.20% to 5.92%, just crossing the threshold, consistent with India's established position supplying active pharmaceutical ingredients to UK manufacturers.
| Chapter |
Description |
UK imports (£bn) |
India 2019 (%) |
India 2024 (%) |
Change (pp) |
Mkt CAGR |
The Mirror Gap Context the Lords Report Could Not See
The Lords report raises the prospect of Chinese goods being diverted to the UK following US tariff escalation — the Committee called on the Government to monitor this risk (recommendation 21). What the report does not draw on, because it is not available to witness evidence sessions, is systematic analysis of whether Chinese supply-chain re-routing was already occurring in the years before the deal.
BACI mirror gap analysis — comparing what China reports exporting to the UK against what UK customs records as arriving from China — shows a sign flip between 2019 and 2024. In 2019, China's reported FOB exports to the UK slightly exceeded UK CIF import records, as expected given insurance and freight markups. By 2024, UK import records substantially exceeded what China reported exporting: a positive gap where there should be a negative one. The most consistent explanation is re-routing through third-country intermediaries, with goods appearing in UK customs records under origin countries other than China.
"The question for UK importers is not whether to diversify away from China-origin supply — that question is already being answered by market forces. The question is whether the alternative origin is genuine."
This is where the India FTA argument becomes analytically distinct from the broader China de-risking narrative. The Agreement's rules of origin require 40–45% regional value content for most manufactured goods — a standard the Lords Committee heard described as "among the most liberal rules of origin we have ever seen" but which nonetheless requires genuine Indian manufacturing content. Goods routed through India to acquire Indian origin — but without meeting the value content threshold — cannot claim the preferential tariff. Re-routed Chinese goods do not satisfy this requirement.
The FTA therefore offers UK importers something that third-country re-routing cannot: verifiable origin that is enforceable at the border and auditable through the HMRC–Indian customs authentication system the Lords Committee recommended should be operational before entry into force. The Lords report treats this system primarily as a compliance burden for UK exporters seeking access to India. For UK importers seeking genuine supply chain diversification, it functions as a quality assurance mechanism for Indian origin claims.
What the Slope Chart Implies for Supply-Chain Planning
The practical import of the data — combining trajectory with current position and market size — suggests three rough groupings of sectors for any UK buyer assessing the FTA's import-side implications.
Sectors with pre-deal momentum and a realistic near-term path to significant supplier status: ceramics (HS69), iron and steel (HS72), organic chemicals (HS29), and pharmaceuticals (HS30). India has crossed or is approaching the 5% threshold in all four, the FTA removes remaining formal barriers, and in pharmaceuticals the non-tariff GMP provisions are the most commercially relevant new element. These are the chapters where supply-chain strategy adjustments are justified over a three-to-five year horizon.
Sectors with large markets, small current share, and rising trajectory: electrical machinery (HS85) is the primary candidate. India's pre-deal gain from 0.61% to 4.12% in a £56.5bn chapter demonstrates both the ceiling of what has been achievable without preferential access and the scale of the remaining gap. The FTA accelerates a trend already in motion. A plausible scenario has India reaching 7–8% of the electrical chapter within a decade — still a minor share, but meaningful in absolute volume terms.
Sectors where the FTA noise exceeds the signal: machinery (HS84), vehicles (HS87), and most heavy capital equipment. The Lords report's optimism about these chapters — grounded in automotive sector testimony and Government impact assessment modelling — is not yet supported by pre-deal bilateral flows. Five years of open access with India, without preferential tariffs, produced a gain of 0.5 percentage points in machinery and a loss in vehicles. The FTA's automotive provisions are primarily about UK exports to India, not Indian imports to the UK, and the structural constraints on India supplying complex manufactured goods to UK buyers at scale are not resolved by a tariff schedule.
A Note on What the Lords Report Gets Right
The framing of the Agreement as a "living instrument" — recommendation 38 of the Lords Committee — is the correct analytical lens for the import side. The slope chart captures five years of movement without preferential access. The next five years, with preferential access but without the bilateral investment treaty, without legal services, and with quality control orders still unresolved, will determine whether India can convert the tariff headroom into genuine supply-chain presence in the large-value sectors where the arithmetic gap is widest.
The Lords Committee's concern about utilisation — SMEs failing to navigate rules of origin complexity, authentication systems not operational at entry into force, sector-specific guidance not yet published — is equally relevant on the import side. UK buyers seeking Indian-origin goods under the agreement face the same authentication burden as UK exporters in reverse. The system that HMRC has made "good progress" on must be functional before preferential rates can be claimed in either direction.
The measurement that matters
The Lords report asks whether the Agreement's terms are good enough. The BACI data ask whether India's supply-chain position is already strong enough to make the terms commercially relevant. In the UK's three largest import sectors — machinery, vehicles, and electrical — the answer is: not yet, but moving in the right direction in electrical, and barely moving in the other two. The FTA creates the conditions for a shift. It does not guarantee one, and the timeline should be measured in years, not quarters.