The landmark India-UK Comprehensive Economic and Trade Agreement (CETA) came into force on Wednesday, 15 July, granting zero-duty access on nearly 99% of India's exports to the United Kingdom — covering almost 100% of bilateral trade value, according to an official government factsheet. The agreement marks the most consequential trade deal India has concluded in over a decade.

What the Agreement Covers

The CETA delivers what officials describe as one of the most ambitious services commitments ever offered by the UK under a free trade agreement. It deepens trade and investment ties through improved market access, simplified trade procedures, enhanced services commitments, and greater professional mobility. New opportunities are created across agriculture, fisheries, manufacturing, services, and other key sectors by reducing trade barriers.

At the same time, the agreement safeguards India's sensitive sectors through calibrated market access and phased tariff liberalisation — a design intended to prevent import shocks while opening export corridors. It also promotes digital trade, innovation, sustainable development, and stronger people-to-people linkages.

Sectors Poised to Gain

Indian farmers and fisherfolk are expected to benefit directly from tariff elimination on agricultural and fisheries products, potentially strengthening rural incomes. Labour-intensive industries — including textiles, leather, footwear, gems and jewellery, handicrafts, food processing, auto components, plastics, and organic chemicals — are positioned for higher export volumes, which could generate significant employment.

The deal places dedicated emphasis on inclusive growth, with specific provisions to expand opportunities for women, youth, and MSMEs. Provisions promoting female participation in trade, innovation, and entrepreneurship are embedded in the agreement's text, alongside commitments to internationally recognised labour rights and fair working conditions.

Services and Professional Mobility

India's services exporters stand to gain substantially. Improved access to the UK services market, mobility provisions, and mutual recognition of professional qualifications open new avenues for skilled Indian professionals and young talent. This is particularly significant given India's existing services trade surplus with the UK.

Bilateral services trade reached $35.44 billion in 2024, with India exporting services worth $21.66 billion and importing $13.78 billion — a services surplus of $7.88 billion. Enhanced UK market access could widen that gap further.

The Trade Numbers in Context

Merchandise trade between the two countries stood at $25.12 billion in 2025-26, with India's goods exports to the UK valued at $13.44 billion and imports at $11.68 billion, yielding a merchandise trade surplus of $1.76 billion. In 2025, India's GDP reached $3.96 trillion against the UK's $3.84 trillion, underlining the near-parity scale of the two economies.

Notably, this is the first major free trade agreement either country has signed with the other — a relationship that had been in negotiation for over three years before reaching conclusion. The CETA's entry into force positions both nations to meaningfully expand what is already a substantial bilateral economic relationship.

What Comes Next

Sectoral implementation and tariff phase-down schedules will now come into effect as per the agreement's timeline. Industry bodies and export councils across textiles, pharma, and IT services are expected to begin leveraging the new market access conditions immediately. The agreement's long-term impact on bilateral trade flows will become measurable over the next two to three financial years.