It was supposed to be the centrepiece of post-Brexit trade ambition. Three years of negotiations, fourteen rounds of talks, and a relationship between two economies that, by most measures, did not need a formal agreement to prove it was working.
But as of May 2026, the UK-India Free Trade Agreement has hit a wall. A dispute over steel tariffs has stalled the rollout before it even began. Both governments are still at the table. The deal is not dead. But it is not done either.
And here is the uncomfortable truth for UK businesses: the trade was never really waiting for the deal anyway.
The Deal That Got Stuck
The sticking point, according to reporting in May 2026, is steel. India has objected to provisions that would expose its steel exports to UK tariff measures, and the disagreement has been enough to delay the rollout of an agreement that had already been widely celebrated as complete.
This is not an unusual pattern in trade diplomacy. The headline announcement and the actual operational reality of a deal are rarely the same moment. Tariff schedules, rules of origin, sector-specific carve-outs — the details that determine whether a deal is genuinely useful to businesses tend to take longer than the signing ceremony suggests.
For UK businesses, the steel dispute is a timely reminder of something worth internalising: trade policy moves at the pace of governments. Business moves faster than that.
Here is what the FTA delay does not change.
The UK and India are already significant trading partners. Bilateral trade between the two countries stood at approximately £42 billion in 2024, making India one of the UK's largest non-EU trade partners. That relationship has grown consistently over the past decade, with or without a formal trade framework in place.
On the services side, India is the UK's dominant supplier of IT outsourcing, software development, and back-office operations. Thousands of UK businesses, from multinationals to early-stage startups, are already running active contractor and supplier relationships with Indian counterparts. Those relationships generate invoices. Those invoices generate payments. And those payments are flowing whether or not a trade agreement has cleared a steel dispute.
On the goods side, India is a major supplier of pharmaceuticals, textiles, engineering products, and chemicals to UK importers. Procurement teams managing these supply chains are not waiting for the FTA. They are already buying, already paying, and already absorbing whatever their payment infrastructure costs them.
The FTA, when it does land, will accelerate all of this. It will lower barriers, open new sectors, and bring new categories of UK businesses into Indian trade relationships for the first time. But for businesses already operating in this corridor, the deal is a future tailwind, not a precondition.
The Payment Problem That Exists Right Now
While the political timeline remains uncertain, the operational challenges of moving money between the UK and India are present and costing businesses money today.
India's domestic payment infrastructure is among the most advanced in the world. The Unified Payments Interface (UPI) handles billions of transactions monthly with near-instant settlement. Domestically, money moves in India with remarkable efficiency.
Internationally, the picture is different. Inbound payments to India still predominantly arrive via SWIFT, which introduces correspondent banking chains, unpredictable intermediary fee deductions, and settlement windows of one to three business days at best. For businesses managing regular payroll for Indian contractors or paying multiple suppliers throughout a procurement cycle, that lag has real working-capital consequences.
In addition to settlement speed, there is the exchange rate problem. The GBP/INR rate moves throughout the trading day. Most banks and legacy providers apply a markup on top of the mid-market rate at the moment of transfer, typically between 2% and 4%, without clearly disclosing it as a separate line item. On a £25,000 supplier payment, a 3% markup costs your business £750 more than a provider offering rates close to mid-market. Repeated across quarterly payments to multiple suppliers, that is a material cost that rarely appears in any procurement review.
And then there is the recipient experience. In a standard SWIFT transfer, intermediary banks along the correspondent chain can deduct fees from the principal before it arrives. Your supplier invoiced £20,000. They receive £19,740. The shortfall creates a query, a reconciliation conversation, and friction in a relationship you are trying to build.
None of these problems will wait for the FTA to be resolved. They exist now, and the businesses that address them now will be in a measurably better position when the deal eventually does land and volumes increase.
The Businesses That Will Benefit Most From the FTA
When the UK-India trade deal does clear its current hurdle and roll out, the businesses that benefit most will not be the ones that start preparing then.
They will be the ones that spent the delay building operational infrastructure. Payment processes, supplier onboarding, FX cost management, reconciliation workflows. The businesses that treat the delay as a gift of preparation time rather than a reason to pause.
The FTA will bring new entrants into the India corridor. Those new entrants will face the same payment infrastructure challenges that existing participants face now. The difference is that existing participants have had time to solve them.
Where Leatherback Fits
The UK-India trade relationship does not need a finalised FTA to be one of the most important payment corridors for British businesses. It already is.
Leatherback offers cross-border financial infrastructure built for businesses that take that corridor seriously. Competitive GBP-to-INR rates, direct settlement into Indian bank accounts, transparent fee structures, and the regulatory standing to operate at the standards this corridor demands.
The deal will close. The volumes will increase. The businesses ready for that moment are already moving.
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