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India and the United Kingdom share a long-standing economic relationship rooted in trade, investment, and shared democratic values. In pursuit of strengthening this partnership, both nations launched negotiations for a Comprehensive Economic and Trade Agreement (CETA) in January 2022, aiming to foster greater economic integration in the post-Brexit landscape.
After 15 rounds of negotiations spanning over 3 years, the two countries formally signed the India–UK CETA on 24 July 2025. This landmark agreement is India’s first comprehensive trade pact with a European country. It represents one of the most ambitious bilateral deals concluded by the UK since exiting the European Union.
The agreement is designed to enhance market access, eliminate or reduce tariffs, promote trade in services and investment, and establish robust cooperation mechanisms across a wide range of sectors. The bilateral trade between the two countries stands at nearly USD 56 billion, and the agreement is projected to double this figure by 2030.
The India-UK Free Trade Agreement creates a level playing field for Indian exporters by removing tariffs across key sectors. Textile, leather, and gem industries gain immediate access to the UK market, while engineering and electronics sectors prepare to double exports through zero-duty provisions. Agriculture sees a major boost with over 95% tariff lines eliminated, helping farmers diversify and meet export targets. Auto components, pharmaceuticals, and chemicals become more competitive, and services benefit from assured market access and smoother professional mobility. The agreement also strengthens digital trade, supports sustainability goals, and empowers MSMEs and inclusive enterprises to expand globally.
Our PoV outlines provisions, tariff liberalisation schedules, sector-wise impacts, and analysis of opportunities and challenges for Indian and UK businesses.
This agreement is aligned with India’s vision of Viksit Bharat by 2047 and complements the growth aspirations of both the countries.
This document outlines UK–India trade ties and key terms of their Free Trade Agreement (FTA), marking a milestone in their strategic partnership.
To maximise the gains from the CETA, the Indian industry must rapidly strengthen its compliance frameworks, invest in product quality and innovation, and engage actively with newly established trade facilitation platforms. Close coordination with trade bodies and state agencies will be vital in translating tariff reductions into tangible export growth, particularly for MSMEs and labour-intensive sectors.
Pallavi Joshi Bakhru decodes the India-UK trade pact, highlighting its impact on MSMEs, sustainability, and inclusive growth in conversation with Govindraj Ethiraj on The Core Report.
The India–UK CETA stands out as a strategically significant milestone in India's evolving trade architecture. As India's first comprehensive agreement with a European nation and the UK's most substantial post-Brexit bilateral deal, it signals a deepening of economic and geopolitical alignment between the two countries.
The agreement is expected to benefit India's labour-intensive sectors such as textiles, leather, marine products, and engineering goods, offering a strong impetus to MSMEs, job creation, and formalisation, particularly in rural and women-led enterprises. While Indian exports gain immediate and broad-based tariff advantages, UK exporters, particularly in the automotive and alcoholic beverage sectors, will benefit more gradually due to quotas and phased reductions.
Overall, the CETA reflects a well-balanced approach that advances India’s global trade ambitions while safeguarding national priorities.
