India and the United Kingdom have reached a pivotal moment in their economic relationship by signing the Comprehensive Economic and Trade Agreement (CETA) on July 24, 2025. This significant Free Trade Agreement (FTA) aims to increase bilateral trade from USD 56 billion to USD 120 billion by 2030, highlighting the strengthening economic ties between these two leading global economies.
A key feature of the India-UK trade agreement is the elimination of tariffs on almost 99% of Indian exports to the UK, encompassing nearly the full trade value. This agreement grants duty-free access to key sectors such as textiles, leather, marine products, gems and jewelry, toys, and emerging industries like engineering goods, chemicals, and auto components. It is expected to generate substantial employment, benefiting artisans, women-led enterprises, and micro, small, and medium enterprises (MSMEs).
From the UK’s perspective, India has opened 89.5% of its tariff lines, representing 91% of UK exports, and introduced phased tariff reductions on sensitive products with some exclusions in sectors like dairy, cereals, pulses, and electronics. The deal also enhances market access in industries aligned with the UK’s industrial strategy, including aerospace and automotive. UK exports to India are projected to increase by nearly 60% by 2040 due to these tariff reductions.
The agreement also promotes trade in services, with notable benefits for IT, financial, professional, educational, and digital sectors. Indian professionals will enjoy easier work mobility in the UK through streamlined visa processes. Additionally, the pact includes a Double Contribution Convention that exempts Indian workers and their UK employers from social security contributions for up to three years, improving competitiveness.
Other key provisions include streamlined customs procedures, enhanced digital trade facilitation, and equal access for UK companies to Indian government procurement, creating opportunities in infrastructure and renewable energy projects. The agreement fosters innovation, sustainable growth, and inclusivity, benefiting farmers, startups, and young entrepreneurs.
Thus, the India-UK CETA establishes a progressive framework set to significantly boost trade, investment, and job creation. It further solidifies the strategic partnership between the two nations for the future.