The India-U.K. Comprehensive Economic and Trade Agreement (CETA), which came into force on July 15, marks a pivotal moment in the evolution of bilateral ties. More than a conventional tariff-reduction pact, the agreement reflects a strategic alignment between two major democracies seeking to recalibrate their economic engagement in a rapidly shifting global order.

The India-U.K. CETA represents one of the most wide-ranging trade agreements concluded by India in recent years. Aligned with the broader India-U.K. Vision 2035, the CETA seeks to deepen cooperation across trade, technology, climate, and innovation. The agreement reflects the growing maturity of the India-U.K. economic partnership and provides a strong institutional framework for expanding trade and investment.

Both countries have further set a target of doubling bilateral trade to over $100 billion by 2030, an objective that now appears more achievable with the new institutional framework in place.

Gains for both sides

The headline gain for India is the zero-duty access secured for 99% of Indian exports to the U.K. This is expected to boost labour-intensive sectors such as textiles, leather, footwear, marine products, and gems and jewellery, which are sensitive to pricing. It will also benefit high-value sectors such as engineering goods and chemicals, where margins depend on consistent market access. Tariffs ranging from 70% on processed foods to 12% on textiles will now come down to zero.

The Indian government has also addressed concerns relating to steel exports. Recognising the U.K.’s new steel measures that came into effect on July 1, both sides have agreed on arrangements that protect commercial interests, minimise market disruptions, and provide greater certainty for Indian exporters. Moreover, the import of electric vehicles will be subject to tariff-rate quotas, with tariffs being reduced in a phased manner. This reflects India’s calibrated approach to balancing consumer access with continued support for domestic manufacturing. India has also retained appropriate safeguards in sensitive sectors such as agriculture and dairy.

The deal also opens access to government procurement markets, enabling Indian firms to bid for a wider range of public contracts in the U.K., especially in sectors such as infrastructure services and consulting.

Equally important is the agreement’s emphasis on services and professional mobility. Expanded access for Indian IT, education, healthcare, financial and professional service providers strengthens India’s position as a global services hub. The agreement also strengthens cooperation in education and skills by enabling U.K. institutions to establish campuses in India.

Modern provisions on digital trade, labour, gender, intellectual property, and innovation, make the agreement future-ready, enabling Indian firms to integrate into the U.K. and global value chains, while attracting investments for emerging sectors such as fintech and green technologies. These provisions will also create new opportunities for startups and Global Capability Centres to further advance collaboration in emerging technologies such as AI.

The U.K. is already India’s sixth-largest investor, contributing around 5% of cumulative FDI (Foreign Direct Investment) equity inflows into India since April 2000. The agreement is expected to further strengthen bilateral investment flows.

To maximise benefits from the CETA, the Indian industry must invest in quality upgradation, standards compliance, and sustainability. Indian companies should leverage mobility provisions to deepen their presence in the U.K. services market, build partnerships, and invest in long-term capabilities.

Again, with opportunities in sectors such as processed foods, textiles, handicrafts, and IT-enabled services and business services, industry bodies have a critical role to play in enabling Micro, Small, and Medium Enterprises (MSMEs) to benefit from the agreement. This requires guidance on compliance and regulatory requirements, as well as procurement opportunities.

Template for the future

At a time of rising regulatory barriers across the world, the India-U.K. CETA reaffirms the value of open, rules-based trade. It supports India’s Atmanirbhar Bharat vision by enhancing competitiveness and complements the Make in India and Digital India schemes through greater market access, services exports, and mobility. For the U.K., the agreement strengthens its strategic economic partnership with one of the world’s fastest-growing major economies.

Upon implementation, the CETA can reshape trade and investment flows, create quality jobs and growth, and transition India to a more competitive and innovation-driven economy thereby serving as a benchmark for trade agreements.

Furthermore, the India-U.K. CETA can also serve as a foundation for trilateral economic partnerships by combining India’s manufacturing strength and skilled workforce with the U.K.’s financial, technological, and global commercial networks. The U.K.’s membership in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, together with the proposed India-EU trade agreement, can further create complementary opportunities for Indian businesses to integrate into wider regional value chains, diversify exports, and strengthen supply chain resilience.

Chandrajit Banerjee is Director General, CII.

Published – July 22, 2026 01:23 am IST

The India-U.K. Comprehensive Economic and Trade Agreement (CETA) will provide a boost for India’s farmers, entrepreneurs and micro, small, and medium enterprises, Prime Minister Narendra Modi said on Wednesday (July 15, 2026), the day the trade deal came into force. 

Officials in the U.K. government as well as Indian industry bodies have welcomed the deal and the opportunities it presents. 

Also Read: What are the gains from the India-U.K. trade deal | Explained

“The CETA will give fresh momentum to our farmers, entrepreneurs and MSMEs,” Mr. Modi posted on X. “Several vibrant sectors will gain stronger access to the U.K. market. It will also deepen cooperation in technology, professional services and innovation, while supporting greater mobility for skilled Indian talent.”

Multiple gains for India

He added that the Double Contribution Convention, the social security agreement between India and the U.K. that also came into effect on July 15, will provide “invaluable support to Indian professionals” who are working temporarily in the U.K. and will strengthen the competitiveness of Indian enterprises.

Commerce Minister Piyush Goyal, too, took to social media to highlight the benefits to India from the deal. 

“The India-UK FTA creates unprecedented opportunities for our textiles, leather, gems & jewellery, engineering goods, marine products, chemicals, processed foods, MSMEs, farmers and manufacturers,” Mr. Goyal said. “It also opens new frontiers for our IT, professional, financial, education and business services sectors, while expanding mobility for Indian talent.”

U.K. hails “watershed moment”

Officials of the U.K. government posted in India were also all praise for the deal, with Harjinder Kang, the UK’s Trade Commissioner for South Asia and British Deputy High Commissioner for Western India, terming it a “watershed moment for the U.K.-India partnership”. 

Speaking at an event organised by the British High Commission in New Delhi, Mr. Kang said that this trade deal is designed to benefit businesses and consumers “from day one” with cheaper, quicker and easier trade.

Indian industry hails sectoral gains

On the part of the Indian industry, Rajeev Singh, Director General of the Indian Chamber of Commerce, pointed out several sector-specific gains that India is set to see through the deal.  

“Securing duty-free access for 99% of our exports is no small achievement, and its impact will be felt across sectors,” Mr. Singh said. “Textiles stand out in particular. Our exporters in Tirupur and Surat have long operated at a duty disadvantage against Bangladesh and Cambodia in the U.K. market, and that gap now closes, giving an entire manufacturing ecosystem room to grow.” 

He added that India’s marine products, pharmaceuticals, leather and engineering goods all stand to gain meaningfully as well. 

“Our pharmaceutical exporters, for instance, are now positioned to compete in a market that imports nearly $30 billion in medicines annually,” he said, adding that Indian consumers will benefit from more accessible Scotch, cosmetics and premium automobiles. 

Services to benefit too

Chandrajit Banerjee, director general of the Confederation of India Industry, also highlighted the sector-specific gains in goods trade, but also added that the gains for the services sectors are equally important. 

“Enhanced market access across IT, financial, professional, education and healthcare services, together with improved mobility provisions and the Double Contribution Convention, will strengthen the global competitiveness of Indian companies and professionals in the U.K.,” Mr. Banerjee said. 

He added that modern provisions on digital trade, government procurement, innovation, intellectual property, MSMEs and labour also make the agreement future-ready, while creating new opportunities for startups, Global Capability Centres (GCCs) and collaboration in emerging technologies such as Artificial Intelligence (AI).

“The agreement also presents immense opportunities for Indian MSMEs to diversify exports, integrate into global value chains and access one of the world’s most sophisticated markets,” Mr. Banerjee said.

Published – July 15, 2026 03:37 pm IST

Piyush Goyal, Minister of Commerce & Industry. File.
| Photo Credit: Kamal Narang

Union Commerce, Industry and Textiles Minister Piyush Goyal is heading for a two-day visit to London, starting Monday, to take forward negotiations for bilateral trade pacts with the United Kingdom and the four-nation European Free Trade Association (EFTA) bloc.

Mr. Goyal will engage in high-level meetings with his U.K. counterparts, including the Secretary of State for International Trade, as well as representatives from various sectors and industries. U.K.’s Minister for International Trade Nigel Huddleston said last week that half of the chapters in the proposed bilateral trade agreement had been worked out and concluded already.

“These meetings will provide an opportunity to discuss the key priorities and objectives of the Free Trade Agreement [FTA] negotiations, with a focus on addressing trade barriers, promoting investments, and fostering greater cooperation in areas such as technology, innovation, and intellectual property rights,” the Commerce Ministry said in a statement.

Meetings are also scheduled with ministers from the EFTA member-countries — Switzerland, Norway, Iceland, and Liechtenstein — to assess the progress made in the ongoing negotiations of a Trade and Economic Partnership Agreement (TEPA). The pact will strive to enhance trade and economic cooperation between India and the EFTA member-countries, fostering an environment conducive to increased investments, reduced trade barriers, and greater market access.