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This week's edition takes a look at the India-UK Free Trade Agreement, Eastern European Global Capability Centers moving to India, and more must-know news.
Recap: I hope you enjoyed last week’s guest article, when fellow Risers Shweta Sawhney and Araddhna Mangala shared “The Green Imperative in India” with us. My key takeaway: India’s booming real estate market is fully transitioning to green buildings, and market demand will lead to a greener future and less emissions.
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Rise of the Week: India and the UK Sign Free Trade Agreement
The long-awaited Free Trade Agreement (FTA) between India and the UK was signed on July 24, 2025, in London by Prime Minister Narendra Modi and UK Prime Minister Keir Starmer. This comprehensive agreement covers trade in goods and services, labor mobility, and much more, offering valuable insights into what we can expect from the upcoming India-EU FTA.
Source: By Prime Minister's Office (GODL-India), GODL-India, https://commons.wikimedia.org/w/index.php?curid=170644330
The agreement represents the UK’s largest trade deal since Brexit and is expected to unlock substantial growth in bilateral trade. Trade volumes are projected to increase sixfold, to USD 120 billion from USD 20 billion today, over the next five years. While the strategic rational and details were already shared in issue 8 of India Rising back in May, the final legal text reveals several noteworthy details according to The Economic Times:
Tariff reductions (India to UK): 99% Indian exports to the UK will now enjoy tariff-free access, significantly improving market opportunities for Indian companies in textiles, cosmetics, marine products, auto parts, or engineering goods.
Tariff reductions (UK to India): Import duties on automobiles entering India will drop to around 10% from 110% today, a clear signal to reduce protective measures in this sector. Tariffs for whiskey and gin will be reduced from 150% to 75%, with further reductions to 40% over a 10 year period.
Public procurement standards: Although India is not a signatory to the WTO's Agreement on Government Procurement, it has agreed to follow similar norms under this bilateral agreement. This opens doors for UK businesses to participate in public projects with higher UK domestic value content, within agreed thresholds.
Women’s economic participation: The FTA includes a dedicated chapter aimed at increasing women's participation in trade benefits, with particular emphasis on supporting women from rural areas, marginalised communities, and economically vulnerable backgrounds.
The landmark agreement also signals the potential parameters of the upcoming FTA between India and the EU, and indicates a gradual shift toward opening key sectors to greater competition. Several elements will be crucial for the India-EU FTA:
Reduced protection on European key sectors: India reducing protective measures for automotive, pharmaceuticals, and government procurement, could unlock opportunities for European businesses in those sectors.
India’s red lines remain: The Indian government didn’t make any concessions on agricultural or dairy goods. Important sectors to protect, this long-standing position in discussions with the EU is unlikely to change in the FTA negotiations.
The India-UK FTA will not only increase market access for Indian businesses to the UK, but indicates a policy shift by the Indian government towards higher competition in certain key sectors. While certain red lines remain, India appears ready to open its market and will likely offer substantial improvements for European companies seeking market access to India as well.
Sources: Government of India, The Economic Times
What Else is Rising?
Multinationals Move their GCCs from Eastern Europe to India
India is the Global Capability Center (GCC) capital of the world, hosting more than 50% of those hubs globally. While Eastern Europe has traditionally served as a strategic location for smaller GCC operations, a notable trend is emerging: multinational corporations are increasingly relocating their functions to India or consolidating their operations there entirely.
As the Times of India reported, this is a noticeable shift throughout all sectors, with several major companies leading the trend:
Financial sector: Deutsche Bank and UBS are relocating key operations to leverage India's deep talent pool in specialised areas like risk modelling.
Tech: Google, IBM, SAP, Intel expanding their Indian presence, particularly in high-growth areas like AI and product engineering.
Industrial: ArcelorMittal has joined the trend, recognising India's capabilities in advanced manufacturing support.
Consumer: Heineken capitalises on India's market proximity and talent advantages.
Two key factors are reasons for this shift: talent saturation and cost arbitrage.
Availability of talent is the primary advantage in India and allows businesses to scale operations flexibly, especially in high demand and innovation critical fields such as AI, cybersecurity, R&D, and product engineering. This is why Deutsche Bank for example decided to move its risk modelling team to India, or why SAP is increasing its AI ERP system engineering team in Bengaluru. In addition to that, the favourable cost structure in India, combined with talent availability, creates compelling economics for large-scale operations.
The facts underscore India’s dominance and ecosystem in this space. GCCs currently employ nearly 2.16 million professionals in India, which is expected to grow to 2.8-3.0 million by 2030. Being strong drivers of value and innovation hubs for multinational businesses, their contribution to India’s GDP is expected to reach USD 200 billion within the same timeframe, according to India’s Finance Minister Nirmala Sitharaman.
Recent announcements of new and expanding GCCs confirm this accelerating trend:
US retail giant Costco will set up its first GCC in Hyderabad and hire up to 1,000 employees in phase 1.
Japanese air-conditioning maker Daikin established its first GCC in Gurgaon and plans to employ 700 experts in AI, digital service, IT, and finance roles.
The UK sports tech company DAZN announced an expansion of its GCC in Hyderabad to 3,000 employees from 1,500 today.
The biopharma leader AstraZeneca announced further expansion of its GCC in Bengaluru with focus on AI and health tech, following its expansion in Chennai.
London listed sports betting and gaming company Entain opened a GCC in Hyderabad to employ a 2,000 member team.
But this trend extends well beyond large multinational corporations. Over the next 12-18 months, around 120 GCCs are expected to be established by mid-sized business with global revenue of up to USD 2 billion alone. This broad-based adoption confirms India’s growing importance as an innovation hub for global enterprises, a trend that particularly European businesses start to recognise in growing numbers.
Sources: Time of India, People Matters, The Economic Times, Reuters, eHealth, The Hindu
India’s UPI Payment Standard Surpasses VISA in Daily Transactions and Becomes Number One Payment System in Number of Transactions
The digital real-time payment system Unified Payments Interface (UPI) does now process more than 650 million transactions per day, and therefore more than the globally leading payment processor VISA (639 million transactions daily).
Source: Amitabh Kant via Times of India (2025)
Reaching number one in terms of transactions is particularly noteworthy because the instant payment platform has only been launched in 7 countries so far, compared to the availability of VISA in more than 200 countries.
Developed by the National Payments Corporation of India (NPCI), a public sector company followed by an initiative of the Reserve Bank of India (RBI) and the Indian Banks' Association (IBA), UPI is considered a leading standard in India’s payments ecosystem. Tourist hotspots and international payment providers globally started accepting payments via UPI, and could lead to further adoption in Europe as well.
Sources: Times of India
Quick Risers
German insurer Allianz signed a non-binding agreement for a 50-50 joint venture with the Reliance Group’s Jio Financial Services for a reinsurance business. (Source: Reuters)
German airline Lufthansa Group will increase its service to India by 11% from Winter 2025, with focus on Delhi, Bengaluru, Mumbai and Hyderabad. (Source: Travel and Tourworld)
India’s Zoho Corp inaugurated a new GCC for AI and robotics talent in Kottarakkara, Kerala. Zoho also acquired the local startup Asimov Robotics. (Source: The Hindu)
Private Equity company KKR sees India as a compelling investment destination, particularly for real estate and infrastructure investments. Other than its peers, KKR is not yet invested in India. (Source: The Hindu)
German defence company RENK Group AG inaugurated a new production facility in Shoolagiri. The facility will produce products for domestic and global customers in the private and defence industries. (Source: Defence Industry Europe)
Finland and India plan mobility agreement in high demand sectors such as IT, education and health. (Source: The PIE Network)
Spotlight: German Indian Innovation Summit 2025
GIIC (German Indian Innovation Corridor) announced the German Indian Innovation Summit. Taking place on 6 October 2025 in Berlin, the gathering brings together decision-makers from Germany and India across business, policy and technology.
Source: GIIC (2025)
Attendance is limited to 300 experts. Register your interest and find more details here.
Curiosity Corner
Your random facts and stories about India and the Indo-European friendship.
This week: The History of India’s GCCs.
India’s journey as a hub for Global Capability Centers (GCCs) began in the mid-1980s with the arrival of pioneering firms like Texas Instruments. By the late 1990s and early 2000s, liberalising policies and India’s growing tech talent attracted large European MNCs such as Siemens, Bosch, Deutsche Bank, and Unilever, who established “captive centers” primarily focused on IT support and back-office operations.
As India’s tech ecosystem matured through the 2000s and 2010s, these European-headquartered centers transformed from basic support hubs into engineering, product development, and innovation drivers. Today, the history of European GCCs in India reflects steady evolution, from operational support to playing a central role in the global strategies of some of Europe’s most prominent corporations.
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