The comprehensive trade agreement between India and the United Kingdom came into force on Wednesday, reducing tariffs on thousands of products while broadening opportunities for businesses and professionals in both countries.
Under the India-UK Comprehensive Economic and Trade Agreement, Indian exporters now enjoy immediate duty-free access to most UK tariff lines. The move is expected to boost labour-intensive industries, including textiles, leather, footwear, marine products, gems and jewellery, and processed foods.
The UK, in turn, secures greater access to one of the world’s fastest-growing major economies through phased tariff reductions and quotas in sectors such as automobiles, alongside expanded opportunities in procurement, financial services, education, insurance and professional services.
The agreement opens “new avenues for trade, investment and innovation,” India’s Trade Minister, Piyush Goyal, said, adding it would create opportunities for Indian businesses.
According to India’s trade ministry, the country exported goods worth $13.44 billion to the UK and imported $11.68 billion during the 2025-26 fiscal year. Bilateral services trade reached $35.44 billion in 2024, with India recording a services surplus of nearly $7.9 billion.
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Britain has eliminated tariffs immediately on 96.8% of its tariff lines, representing 97.7% of trade value. India has removed duties on 64.1% of tariff lines and will gradually phase out tariffs on an additional 21%, while keeping sensitive products protected.
Indian officials expect significant gains in sectors previously subject to UK tariffs of between 4% and 20%. Exports of marine products, textiles, leather goods, footwear, gems and jewellery will now enter the British market duty-free, improving their competitiveness.
The UK is also expected to benefit from India’s phased market opening for automobiles and alcoholic beverages. Passenger vehicle imports will operate under an annual quota of 37,000 completely built units at preferential tariff rates.
The services component of the agreement expands market access across 137 sub-sectors, including information technology, business services, telecommunications, finance and education. It also simplifies temporary entry for business visitors, intra-company transferees, investors, service providers and independent professionals.
In addition, a linked Double Contribution Convention exempts eligible Indian professionals and their employers from contributing to the UK’s National Insurance system for assignments lasting up to five years, benefiting about 75,000 workers and 900 employers.
The agreement also grants Indian businesses access to Britain’s government procurement market, valued at approximately £90 billion, while India is opening reciprocal procurement opportunities estimated at about $114 billion.
