India and the United Kingdom formally sealed the Comprehensive Economic and Trade Agreement (CETA) on July 24, 2025, signaling a major deepening of economic ties between the two nations. Negotiated since January 2022 and finalised in principle in May, the pact unlocks tariff-free access for 99% of Indian exports to the UK, encompassing textiles, apparel, chemicals, auto components, footwear, leather, and engineering goods among others.
In return, Britain’s average import tariff into India will fall dramatically from around 15% to just 3%, with steep reductions expected in categories such as whisky, gin, cosmetics, and electric vehicles under various quota structures.
Economic projections underscore the deal’s significance: bilateral trade is targeted to double to approximately US$ 120 billion by 2030, and UK exports to India could grow by nearly 60% by 2040, adding an estimated £4.8 billion annually to the British economy.
The agreement goes beyond tariffs. It facilitates temporary stays for Indian business visitors and contractual service providers, supports social security contribution exemptions for Indian professionals in the UK, and enhances access for UK firms to India’s vast public procurement market.
Indian exporters are set to reap substantial dividends, especially in labour-intensive sectors such as textiles, marine products, leather goods, and sports equipment, among others. Conversely, UK businesses stand to gain from cheaper Indian goods, including garments, footwear, and food items, supported by tariff cuts and regulatory easing.
The bilateral trade deal also received strong approval from business communities on both sides, hailed as Britain’s most significant post‑Brexit standalone agreement and a strategic leap forward in India’s engagement with advanced economies.
