The agreement is expected to reduce or eliminate tariffs on a wide range of Indian exports, improve market access for Indian services companies and simplify professional mobility between India and the United Kingdom.
India and the United Kingdom began negotiations for a free trade agreement in 2021 under the Enhanced Trade Partnership and the India-UK Roadmap 2030, which aimed to strengthen economic relations and double bilateral trade to $100 billion by 2030.
After 14 rounds of negotiations, both countries finalised the agreement in May 2025. The trade pact was signed in London in July 2025, while the accompanying social security agreement was signed in February 2026.
Unlike traditional free trade agreements that primarily focus on reducing import duties, CETA covers a broader range of areas, including goods, services, professional mobility and regulatory cooperation.
A major benefit for India under the agreement is the removal of import duties on several key product categories. Tariffs of up to 70 per cent on processed foods, 21.5 per cent on marine products, 18 per cent on engineering goods and auto components, 16 per cent on leather and footwear, 12 per cent on textiles and garments, and 8 per cent on chemicals and pharmaceuticals will be reduced to zero.
However, India has kept several sensitive sectors outside the agreement, including dairy products, cereals, millets, edible oils, oilseeds, apples and several vegetables.
The agreement is expected to provide significant opportunities for Indian exporters as the United Kingdom remains one of the world's major importing economies, while India's current share in the British market remains limited.
In 2025, the United Kingdom imported goods worth $928.9 billion from global markets, but only $15.2 billion came from India. India accounted for just 1.6 per cent of Britain's total imports. Similarly, the United Kingdom purchased only 3.4 per cent of India's global merchandise exports, indicating substantial potential for future trade expansion.
Several sectors where India has strong manufacturing capabilities also match the United Kingdom's import requirements. These include garments and textiles, leather products, processed foods, cereals, fruits and vegetables, spices, seafood, automobiles, motorcycles, engineering products, electronics and machinery.
The tariff reductions under CETA are expected to help Indian companies increase their presence in sectors where their market share remains limited.
India exported garments worth $16.3 billion globally in 2025, while the United Kingdom imported garments worth $21.3 billion. However, India supplied only $1.3 billion, accounting for 6.1 per cent of Britain's garment imports. As the United Kingdom already purchases around 8 per cent of India's garment exports, lower tariffs could further strengthen this trade relationship.
In the processed food sector, the United Kingdom imported products worth $33.4 billion in 2025, but India's contribution was only $354 million. India's share of the British processed food market stood at 1.1 per cent despite India's global processed food exports reaching $10 billion.
The United Kingdom imported automobile products worth $92.2 billion, but India supplied only $325 million, giving Indian exporters a market share of 0.4 per cent. India's global automobile exports stood at $25.1 billion. Lower tariffs under CETA could support exports of vehicles, motorcycles and components, although compliance with United Kingdom quality standards and rules of origin will remain important.
In chemicals, India exported products worth $40 billion globally but supplied only $908 million to the United Kingdom, which imported chemicals worth $35.2 billion.
In pharmaceuticals, India exported medicines worth $25.8 billion globally but accounted for only $1 billion, representing 3.2 per cent of United Kingdom pharmaceutical imports.
India exported engineering products worth $20.5 billion globally but supplied only $959 million to the United Kingdom, securing a market share of around 5.2 per cent. The removal of tariffs is expected to improve the competitiveness of Indian engineering exports.
The agreement also provides major benefits for India's services sector. The United Kingdom has opened access across 137 services sub-sectors, making it one of the broadest commitments offered by the country in a trade agreement.
Indian companies operating in information technology, IT-enabled services, financial services, engineering, healthcare, education, professional services, telecommunications and consulting are expected to benefit from improved market access and greater regulatory certainty.
CETA also provides easier mobility arrangements for business visitors, intra-company transferees, contractual service suppliers, independent professionals and investors.
For the first time, the agreement creates dedicated annual opportunities for 1,800 Indian chefs, yoga instructors and classical musicians to work in the United Kingdom.
The Double Contribution Convention, which will come into effect along with CETA, is aimed at reducing social security-related costs for Indian professionals and businesses.
Under the agreement, Indian employees sent to the United Kingdom on temporary assignments and their employers will not be required to make social security contributions in both countries simultaneously. The exemption period has been extended from three years to five years.
More than 75,000 Indian professionals and over 900 Indian companies are expected to benefit from the arrangement, making international assignments more cost-effective and encouraging greater business mobility.
India and the United Kingdom have also reached an understanding regarding Britain's new steel trade measures. According to the Ministry of Commerce and Industry, around 85 per cent of India's steel exports will remain outside the scope of the United Kingdom's new restrictions.
For steel products covered under the measures, Indian exporters will continue to receive market access through tariff quotas and other agreed mechanisms designed to minimise disruption to trade.
The government has stated that the agreement is designed to benefit multiple sections of the Indian economy. Farmers and food processors are expected to gain access to a larger export market, while fishermen may benefit from reduced tariffs on seafood exports.
Labour-intensive sectors such as textiles, leather and footwear are expected to witness increased demand and employment opportunities. The agreement is also projected to create new avenues for micro, small and medium enterprises, startups, women entrepreneurs and service professionals by enabling easier participation in United Kingdom supply chains and access to one of the world's largest consumer markets.
The implementation of the India-UK CETA and the Double Contribution Convention represents a major milestone in bilateral economic relations, creating new possibilities for trade expansion, professional mobility and deeper cooperation between the two countries.
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