The long-awaited India-UK Comprehensive Economic and Trade Agreement (CETA) came into effect on Wednesday, marking one of India's most significant bilateral trade deals. The agreement sharply reduces tariffs, expands access for businesses and professionals, and is expected to boost trade, investment and employment in both countries over the coming years.
The pact is expected to provide a major push to Indian exports in labour-intensive sectors while giving British companies greater access to India's fast-growing consumer market.
Britain will immediately eliminate import duties on 96.8 percent of its tariff lines, covering 97.7 percent of trade value.
India will remove tariffs immediately on 64.1 percent of tariff lines and gradually phase out duties on another 21 percent.
Sensitive sectors have been kept outside the agreement.
The deal covers trade in goods, services, investments, professional mobility and government procurement.
Several export-oriented industries are expected to benefit from duty-free access to the UK market.
Key beneficiaries include:
Textiles and garments
Leather and footwear
Marine products
Gems and jewellery
Processed food products
Earlier UK import duties on many of these products ranged between 4 percent and 20 percent. Their removal is expected to improve the competitiveness of Indian exporters.
The agreement significantly expands market access across 137 service sectors, including:
Information technology
Business services
Telecommunications
Financial services
Education
Professional services
It also eases temporary movement of:
Business visitors
Company transferees
Investors
Independent professionals
Service providers
A major feature of the agreement is the Double Contribution Convention.
Under this arrangement:
Eligible Indian professionals working in the UK for up to five years will not have to contribute to Britain's National Insurance system.
Their employers will also receive the exemption.
Around 75,000 Indian professionals and nearly 900 employers are expected to benefit.
British businesses will receive improved access to several sectors in India, including:
Automobiles
Financial services
Insurance
Education
Professional services
Government procurement
Imports of fully built passenger vehicles from the UK will be allowed under a phased quota system, with up to 37,000 vehicles annually eligible for preferential tariff treatment.
The agreement gives Indian companies access to Britain's government procurement market, valued at nearly £90 billion (around ₹10.5 lakh crore).
British firms, in turn, will gain access to Indian public procurement opportunities worth about $114 billion (around ₹9.8 lakh crore).
According to official figures:
India's merchandise exports to the UK stood at $13.44 billion (around ₹1.16 lakh crore) in 2025-26.
Imports from the UK were $11.68 billion (around ₹1.01 lakh crore).
Bilateral services trade reached $35.44 billion (around ₹3.05 lakh crore) in 2024.
India recorded a services trade surplus of nearly $7.9 billion (around ₹68,000 crore).
The agreement is expected to accelerate bilateral trade further by lowering costs, improving market access and encouraging greater investment flows between the two economies.