Decoding the India-UK CETA: Check what’s changing in terms of tariffs, import duty & more

The India-UK Comprehensive Economic and Trade Agreement, which comes into force on July 15, almost a year after it was signed, will give immense opportunity to Indian exports to garner higher market share.

Kirtika Suneja takes a look at the bilateral trade landscape, gains and the hurdles overcome to achieve the historic deal:

Bilateral goods trade between India and the UK has steadily expanded over the past five years. India’s exports rose from $10.4 billion in FY22 to $13.4 billion in FY26, while imports increased from $7.1 billion to $11.7 billion during the same period.

The FTA resolves key trade barriers by excluding India’s steel exports from the UK’s proposed safeguard measures and addressing concerns around the UK’s Carbon Border Adjustment Mechanism (CBAM). Around 85% of India’s steel exports remain outside these measures, with iron and steel exports to the UK valued at $893 million in FY26.

Also read: Want a Rolls-Royce or Land Rover? Premium cars to go cheaper by Rs 1-3 crore thanks to UK FTA

The agreement removes tariffs on a wide range of Indian exports to the UK. Sectors benefiting from duty-free access include marine products (20%), transport and auto components (18%), leather and footwear (16%), electrical machinery (14%), textiles and clothing (12%), chemicals (8%) and gems and jewellery (4%). Tariff concessions do not apply to dairy products, apples, edible oil or oats.

Tariff-free entry of British goods

Under the trade agreement, India will eliminate or significantly reduce tariffs on several British products. Key beneficiaries include chocolate (30%), soft drinks and non-alcoholic beer (30%), gingerbread and sweet biscuits (30%), auto parts, machinery and tools (15%), soap and shaving cream (10%), and medical technology devices (7.5%).

The FTA presents an opportunity for India to expand its exports to the UK across multiple sectors. India currently holds the highest market share in footwear and parts (10.2%), made-ups (10.2%), textiles (7.8%), leather products (7.3%) and garments (6.1%), with scope to increase exports in processed foods, machinery, electronics and agricultural products.

The India-UK Free Trade Agreement allows British companies to bid for non-sensitive Indian government procurement contracts. It also reduces import duties on British cars, electric vehicles and whisky, while India will gradually lower tariffs on select UK products over a 10-year period.