India’s trade relationship with the UK enters a new phase on 15 July, when the Comprehensive Economic and Trade Agreement (CETA) takes effect—giving Indian exporters duty-free access to most of the UK market and widening opportunities for services and professionals.
The pact is India’s first major free trade agreement with a developed economy to become operational in recent years. The government expects it to lift bilateral trade between the world’s fifth- and sixth-largest economies to $100 billion by 2030. Mint explains:
What is the India-UK CETA—and why does it matter?
CETA is a comprehensive trade agreement designed to cut tariffs, widen market access and deepen investment and economic cooperation.
Its 30 chapters go beyond tariff cuts to cover digital trade, government procurement, innovation, labour, environment and gender.
Commerce secretary Rajesh Agrawal has described the agreement as a “gold standard” trade pact because of its wide sectoral coverage and deep commitments on tariff and non-tariff measures while safeguarding India’s sensitive sectors.
between India and the UK stood at $25.12 billion in 2025-26, while bilateral services trade was valued at $35.44 billion in 2024. The broader bet is that lower trade barriers will boost exports, attract investment, create jobs and help Indian companies integrate more deeply into global value chains.
What market access has India secured?
India has secured duty-free access on 99.5% of the value of its exports to the UK, covering 98.8% of tariff lines.
The UK has eliminated tariffs across a broad range of products, including engineering goods, textiles and apparel, leather and footwear, gems and jewellery, chemicals, plastics, marine products, processed food and several agricultural products.
India, meanwhile, has offered preferential market access covering 89.4% of the value of UK exports, with tariff reductions phased over time for sensitive sectors.
Which Indian sectors stand to gain?
Engineering goods are expected to be among the biggest beneficiaries. The UK imports engineering products worth nearly $193.5 billion annually, while India’s engineering exports to the market currently stand at about $4.28 billion.
and apparel will receive immediate duty-free access across 1,143 tariff lines, replacing tariffs of up to 12%. This could improve India’s competitiveness against Bangladesh, China, Pakistan, Vietnam, Cambodia and Türkiye.
Leather and footwear exporters will benefit from the removal of tariffs of up to 16%. Gems and jewellery, chemicals, marine products, electrical machinery, rubber, plastics and processed food are also expected to see higher shipments.
Agricultural exports, including fresh fruits and vegetables, cereals, honey, bakery products and processed food, will gain wider access to the UK market.
How does the pact change the opportunity for services and professionals?
The UK has offered market access across 137 services sub-sectors, including IT, financial and professional services, education, telecommunications and business services.
The agreement also improves mobility for business visitors, investors, contractual service suppliers, intra-corporate transferees and independent professionals, while facilitating recognition of professional qualifications.
Alongside CETA, India and the UK have operationalised the Double Contribution Convention (DCC), which exempts eligible Indian employees on temporary assignments of up to five years from UK National Insurance contributions while they continue contributing to India’s social security system.
The commerce ministry expects the arrangement to benefit more than 75,000 Indian professionals and around 900 employers, generating annual savings of more than $600 million.
What does CETA mean for MSMEs and businesses beyond tariffs?
The government expects the pact to benefit micro, small and medium enterprises (MSMEs) by lowering tariff barriers, reducing trade costs and simplifying market access.
Labour-intensive sectors such as textiles, apparel, leather, footwear, handicrafts, marine products and food processing have a large MSME presence and are expected to see higher exports and employment generation.
The agreement also opens opportunities for women entrepreneurs, startups and smaller exporters to participate more actively in global value chains.
Beyond tariffs, Indian companies gain access to the UK’s government procurement market, valued at around £90 billion annually. The pact also sets rules covering digital trade, customs facilitation and regulatory cooperation.
Industry experts believe greater exposure to UK regulations could help Indian companies build familiarity with the standards and compliance requirements of developed markets.
What could limit the gains?
The agreement does not automatically translate into higher exports. Businesses will need to meet rules-of-origin requirements, product standards and other regulatory conditions to fully use the preferential access.
“As the comes into effect, businesses on both sides stand to benefit from improved market access, lower trade costs and greater certainty across goods and services trade,” said Agneshwar Sen, trade policy leader at EY India.
According to Sen, sectors such as textiles and apparel, leather and footwear, gems and jewellery, engineering goods, auto components, chemicals, agriculture, marine products, and IT, financial and professional services are expected to benefit the most. However, he said the full gains would depend on effective implementation, adherence to rules of origin and businesses aligning their supply chains and compliance frameworks.
Is CETA a template for India’s next trade deals?
The India-UK CETA is widely seen as a template for India’s next generation of trade agreements with advanced economies. Its implementation comes as India pursues similar negotiations with the European Union, Oman and other partners.
The textile industry is already preparing for the next phase. On 14 July, the Confederation of Indian Textile Industry (CITI) and the European Apparel and Textile Confederation (EURATEX) launched the EU-India Textile and Apparel Dialogue (TAD) at Bharat Tex 2026 to support implementation of the proposed India-EU Free Trade Agreement.
CITI chairman Ashwin Chandran said the platform assumes significance as India and the European Union are expected to sign their trade agreement later this year.
The EU was India’s second-largest export market for textiles and apparel in 2025, with shipments worth $7.6 billion. Indian exporters have historically faced a tariff disadvantage compared with countries enjoying preferential access to the European market—a gap the proposed India-EU FTA is expected to narrow.