India-UK Comprehensive Economic and Trade Agreement Implementation

The India-UK Comprehensive Economic and Trade Agreement (CETA) has come into effect, marking a significant milestone in bilateral economic relations between the two countries. The agreement provides zero-duty access on nearly 99% of India's exports to the UK, covering almost 100% of the trade value, and is expected to strengthen India's export competitiveness across multiple sectors.

Bilateral Trade Context

In 2025, India recorded a GDP of USD 3.96 trillion while the UK economy stood at USD 3.84 trillion. Merchandise trade between the two countries reached USD 25.12 billion in 2025-26, with India's exports to UK valued at USD 13.44 billion and imports at USD 11.68 billion, resulting in a trade surplus of USD 1.76 billion. Services trade has been equally robust, with total bilateral services trade touching USD 35.44 billion in 2024, where India exported services worth USD 21.66 billion to the UK and imported USD 13.78 billion, generating a services trade surplus of USD 7.88 billion.

Investment and Diaspora Relations

The UK is India's 6th largest inward investor with cumulative equity investments of USD 35 billion until September 2024. India's outward investment in the UK stood at USD 19 billion until March 2024. As of July 2025, there are 971 Indian companies operating in the UK that employ over 100,000 people, while 667 British companies operate in India with over 500,000 employees. The UK is home to a large Indian diaspora of 1.864 million people, accounting for 2.6% of the UK's population, with 369,000 Indian passport holders living in the UK.

Market Access and Safeguards

India has offered tariff concessions on 89.5% of its tariff lines, covering 91% of the UK's exports. 24.5% of the UK's export value will receive immediate duty-free access, with concessions on other products to be implemented gradually. Sensitive sectors including agriculture (dairy, cereals, millets, pulses, apples, edible oils, oats, vegetables) and strategically important industries have been protected through exclusions or phased tariff reductions over 5, 7, or 10 years. For automobiles, India adopted a calibrated, phased, and development-oriented quota-based liberalization strategy with an annual quota of 37,000 passenger vehicle CBUs at preferential tariffs.

Sector-Specific Benefits

Textiles

Zero-duty access on 1,143 tariff lines, eliminating tariff disadvantage against Bangladesh, Pakistan and Cambodia. India exports USD 1.79 billion to the UK and holds a 6.1% market share of the UK's USD 28.8 billion textile import market.

Agriculture

Zero-duty market access across 1,437 tariff lines (14.8% of all tariff lines), with agricultural exports expected to increase by over 50% during the next 3 years. India's agricultural exports were valued at USD 45.05 billion in 2022-23.

Leather & Footwear

Duty-free market access for footwear exports to the UK's USD 8.9 billion market. Current exports stand at USD 494 million in 2024, with projections exceeding USD 900 million.

Engineering Goods

Zero-duty market access across 1,659 tariff lines (17% of all tariff lines), eliminating tariffs of up to 18%. Engineering exports to the UK grew by 11.7% in 2024-25 and are projected to double to over USD 7.5 billion by 2029-30.

Pharmaceuticals

Zero-duty market access across 56 tariff lines (0.6% of total), eliminating duties on medical devices including surgical instruments, diagnostic equipment, ECG machines, and X-ray systems. UK imports pharmaceuticals worth nearly USD 30 billion but imports less than USD 1 billion from India.

Steel Sector

In March 2026, UK introduced new steel measures on 188 tariff lines. India secured expanded tariff-free access with country-specific quota increased to 168,029 tonnes and exclusive 945,000 tonnes under Authorised Use Scheme for Indian exporters.

Services and Mobility Provisions

India secured commitments covering all 12 major service sectors and 137 sub-sectors, representing over 99% of India's export interests. The agreement includes Mutual Recognition Agreements for nursing, accountancy, and architecture within 12 months. The Double Contribution Convention eliminates dual social security contributions for assignments of up to 60 months, benefiting over 75,000 Indian professionals and around 900 Indian companies with annual savings exceeding USD 600 million.

Mobility provisions include: Business Visitors (90 days in any 6-month period), Intra-Corporate Transferees (3 years across all sectors), Investors (1 year), Contractual Service Suppliers (12 months in any 24-month period across 33 sub-sectors), and Independent Professionals (12 months in any 24-month period across 16 sub-sectors). The UK has agreed not to impose numerical restrictions or an Economic Needs Test.

Government Procurement and Digital Services

Indian suppliers gain access to the UK's government procurement market worth GBP 90 billion (USD 122 billion), while the UK receives reciprocal access to India's USD 114 billion procurement market. The agreement strengthens market access for digitally delivered services such as IT, professional consultancy, education, training, and telecommunications.