India-UK CETA explained:
What's changing in tariffs, duties from July 15?
New Delhi, Jul 13, 2026
India and the UK's trade deal comes into force on July 15, lowering import duties on many Indian exports and offering social security relief for professionals
The India-UK Comprehensive Economic and Trade Agreement (CETA) will come into force on July 15, 2026, marking one of India's biggest bilateral trade deals in recent years.
Alongside the trade pact, the Double Contribution Convention (DCC), also known as the social security agreement, will also take effect on the same day. It will allow many Indian professionals working temporarily in the UK to avoid paying social security contributions in both countries.
The agreement is expected to reduce or remove tariffs on a wide range of Indian exports, improve access for Indian services companies, and make it easier for professionals to work in the UK.
India and the UK began working towards a free trade agreement in 2021 under the Enhanced Trade Partnership and the India-UK Roadmap 2030, which aimed to strengthen economic ties and double bilateral trade to $100 billion by 2030.
After 14 rounds of negotiations, both countries concluded the deal in May 2025. The agreement was signed in London in July 2025, while the accompanying social security pact was signed in February 2026.
Both agreements will now become operational from July 15.
What changes under CETA?
Unlike traditional free trade agreements that mainly focus on reducing import duties, CETA covers a much wider range of areas.
One of the biggest gains for India is that the UK will remove import duties on several key products.
Tariffs of up to 70 per cent on processed foods, 21.5 per cent on marine products, 18 per cent on engineering goods and auto components, 16 per cent on leather and footwear, 12 per cent on textiles and garments and 8 per cent on chemicals and pharmaceuticals will be reduced to zero.
At the same time, India has kept several sensitive sectors outside the agreement, including dairy products, cereals, millets, edible oils, oilseeds, apples and several vegetables.
Why is this important for Indian exporters?
Although the UK is a large importing nation, India's presence there remains relatively small.
In 2025, the UK imported goods worth $928.9 billion from across the world, but only $15.2 billion came from India. That means India accounted for just 1.6 per cent of Britain's imports.
Similarly, the UK bought only 3.4 per cent of India's global merchandise exports, suggesting there is significant room for trade to grow.
Several sectors where India already has strong manufacturing capabilities also match Britain's import demand. These include garments and textiles, leather products, processed foods, cereals, fruits and vegetables, spices, seafood, automobiles, motorcycles, engineering products, electronics and machinery.
Which sectors could see the biggest opportunity?
The tariff cuts could help Indian companies expand their share in several UK markets where their presence is currently limited.
Garments and textiles
India exported garments worth $16.3 billion globally in 2025, while the UK imported $21.3 billion worth of garments.
However, India supplied only $1.3 billion, or 6.1 per cent, of Britain's garment imports. Since the UK already buys around 8 per cent of India's garment exports, lower tariffs could further strengthen this trade.
Processed food
The UK imported $33.4 billion worth of processed food in 2025, but imported only $354 million from India.
India's share of the UK market stood at just 1.1 per cent, despite exporting $10 billion worth of processed food globally.
Automobiles and auto components
Britain imported auto products worth $92.2 billion, but only $325 million came from India, giving Indian exporters a market share of just 0.4 per cent.
India's global auto exports stood at $25.1 billion. Lower tariffs under CETA could help exports of vehicles, motorcycles and components, although meeting UK quality standards and rules of origin will remain important.
Chemicals and pharmaceuticals
India exported chemicals worth $40 billion globally but supplied only $908 million to the UK market, which imported chemicals worth $35.2 billion.
In pharmaceuticals, India exported $25.8 billion globally but accounted for only $1 billion, or 3.2 per cent, of UK imports.
Engineering goods
India exported engineering products worth $20.5 billion globally but supplied only $959 million to the UK, giving it a market share of around 5.2 per cent.
The removal of tariffs could improve the competitiveness of Indian engineering exports.
What does the agreement mean for Indian services?
The UK has opened access across 137 services sub-sectors, making this one of its broadest commitments in a trade agreement.
Indian companies operating in IT, IT-enabled services, financial services, engineering, healthcare, education, professional services, telecommunications and consulting are expected to benefit from easier market access and greater regulatory certainty.
The agreement also provides easier mobility for business visitors, intra-company transferees, contractual service suppliers, independent professionals and investors.
In a first for India, the agreement creates dedicated annual opportunities for 1,800 Indian chefs, yoga instructors and classical musicians to work in the UK.
What is the Double Contribution Convention?
The Double Contribution Convention (DCC) is the social security agreement that comes into effect alongside CETA.
It allows Indian employees sent to the UK on temporary assignments, and their employers, to avoid paying social security contributions in both countries at the same time.
The exemption period has also been extended from **three years to five years**.
More than 75,000 Indian professionals and over 900 Indian companies are expected to benefit, reducing costs for businesses and making overseas assignments more attractive.
What about steel exports?
India and the UK have also reached an understanding on Britain's new steel trade measures.
According to the Ministry of Commerce & Industry, around 85 per cent of India's steel exports will remain outside the UK's new restrictions. For products covered under the measures, Indian exporters will continue to receive access through tariff quotas and other agreed mechanisms aimed at limiting disruption to trade.
Who stands to benefit?
The government said the agreement is designed to benefit a wide section of the economy.
Farmers and food processors could gain access to a larger export market. Fishermen may benefit from lower tariffs on seafood exports. Labour-intensive sectors such as textiles, leather and footwear could see higher demand and job creation.
The agreement is also expected to create opportunities for MSMEs, startups, women entrepreneurs and service professionals by making it easier to participate in UK supply chains and access one of the world's largest consumer markets.
[The Business Standard]
