- India-UK trade pact implemented, targeting $112 billion trade.
- Indian exports gain duty-free access to UK market.
- Indian IT gains UK government access; professionals avoid NI.
While Indians will soon be able to sip cheaper Scotch whiskey and buy inexpensive British cars, goods produced in India will not make much of a difference to the Britishers under the India-UK free trade agreement, also known as the Comprehensive Economic and Trade Agreement (CETA), that came into effect Wednesday. However, Indian IT companies will stand to gain majorly from the trade pact as they will now be able to participate in the UK government-run programmes, ABP Live has learnt.
India-UK CETA is a comprehensive FTA, aimed at deepening bilateral economic integration by doubling the trade target to $112 billion by 2030 from $56 billion in 2024. The negotiations to conclude the trade pact was formally initiated post-Brexit, with talks starting in January 2022. After multiple rounds of negotiations, the agreement was signed on July 24, 2025.
Under the deal, India will be able to get duty-free access for 99 percent of Indian exports to the UK, covering nearly 100 percent of trade value. Some of the major gains will be felt in the labour-intensive sectors such as textiles, apparel, leather, footwear, gems & jewellery, marine products, engineering goods, chemicals, tea, coffee, and spices.
“While India will be able to export goods produced in the labour-intensive sectors, in terms of market access clearly the UK stands to gain in this deal. After all, the United Kingdom is a small market and they are having a slowdown now, so we cannot expect a miracle under this deal. Also, with the UK being a low tariff market and India being a high tariff market, it is natural that they will get more market access than us,” a top official told ABP Live on condition of anonymity.
India-UK trade in goods and services stood at around $64.61 billion in 2025, with the UK ranking as India’s 11th largest trading partner.
Arpita Mukherjee, Professor, ICRIER, who was involved in the feasibility study of the FTA, told ABP Live, “Under the deal, if properly utilised, India IT companies can get a major competitive advantage over others. This is because under this FTA, Indian IT companies will be able to get access to government procurement in sectors like the NHS (National Health Service) which is a major thing. This is the first such agreement where India has experimented with the government procurement chapter which goes beyond the concept of cooperation.”
She also said, “This is an experimental and forward-looking FTA. The real benefit lies in Indian regulatory standards becoming world-class and the UK accepting our regulatory processes even if that does not translate into huge trade volumes, which will take time.”
Yet another segment where India stands to gain under the FTA is the Double Contribution Convention (DCC). Under this, Indian professionals, who will be on temporary work permits for up to five years, will not have to make any contribution towards the UK National Insurance (NI) – UK’s version of a social security. This will result in reduction of costs for businesses on both sides involved in cross-border employment.
Earlier, Indian professionals on temporary UK assignments, even if that was for less than five years, were making contributions towards the NI but could never get the returns when they left the country.
“The Agreement will enhance market access, strengthen global value chains and deepen collaboration in advanced manufacturing, digital economy, financial services, education and clean technologies. It is an important step towards strengthening the India-UK strategic partnership, advancing sustainable economic growth and shared prosperity,” said Rajan Bharti Mittal, Vice Chairman, Bharti Enterprises.
The UK is also India’s second largest services export country with a 6.7 percent share in services exports.
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UK’s Gains Under CETA
With India removing tariff on 90 percent of UK tariff lines, covering 92 percent of current UK exports to India. As a result, UK-made goods that will become cheaper in the Indian markets are whisky, gin, automobiles, cosmetics, medical devices, advanced manufacturing products, salmon, lamb, and other agri-food products.
The UK’s financial, professional, telecom, construction, and other services sectors in India’s growing market will also get more access.
“The UK-India trade deal brings sweeping benefits for a wide range of sectors. From today, import duty on Scotch whisky has been cut from 150 percent to 75 percent, which should make a really significant difference to the price the consumer pays. Import duties on premium UK-built cars will also begin to fall from over 110 percent to 10 percent, making iconic British brands cheaper for Indian consumers,” Lindy Cameron, High Commissioner of the UK to India, said at a media conference on Wednesday.
Cameron also said, “The best of UK beauty and cosmetics, homeware and sports goods will all be cheaper for Indian consumers to purchase. Clean energy, 98 percent of environmental and green goods are being liberalised, supporting India’s energy transition. It will also improve business mobility between India and the UK.”
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“The UK-India FTA is the new gold standard of trade deals: pro-worker, pro-innovation, and pro-growth. It is also the biggest and the most ambitious modern free trade agreement to enter into force to date for both of our countries,” she added.
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