India’s broad free trade pact with the United Kingdom took effect on Wednesday, reducing tariffs on thousands of goods and opening up opportunities for businesses and professionals in both countries.
Under the India-UK Comprehensive Economic and Trade Agreement, Indian exporters can now access most UK tariff lines duty-free immediately. The move would benefit labour-intensive industries such as textiles, leather, footwear, marine products, gems and jewellery and processed foods.
In turn, the UK will gain greater access to one of the world’s fastest growing major economies, with phased tariff reductions and quotas in sectors such as automobiles, and increased opportunities in procurement, financial services, education, insurance and professional services.
The pact opens up “new avenues for trade, investment and innovation,” India’s trade minister Piyush Goyal said, adding it would create opportunities for Indian businesses.
India’s trade ministry said the country exported goods worth $13.44 billion to the UK and imported $11.68 billion in the fiscal year 2025-26. In 2024, bilateral trade in services reached US$35.44 billion with India running a services surplus of nearly US$7.9 billion.
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Britain has eliminated tariffs immediately on 96.8 per cent of its tariff lines covering 97.7 per cent of trade value. India has eliminated duties on 64.1% of tariff lines and will phase out tariffs on a further 21% gradually, while maintaining protection on sensitive products.
India’s officials expect big gains in sectors previously subject to 4-20 per cent tariffs in the UK. Exports of marine products, textiles, leather products, footwear, gems and jewellery will now enter the British market duty free, improving their competitiveness.
The UK is also likely to benefit from India’s gradual opening up of the market for automobiles and alcoholic beverages. The annual quota for passenger vehicle imports would be 37,000 completely built units at preferential tariff rates.
The services portion of the deal widens market access in 137 sub-sectors, including information technology, business services, telecommunications, finance and education. It also facilitates the entry of temporary business visitors, intra-company transferees, investors, service providers and independent professionals.
Also, the Double Contribution Convention linked means that eligible Indian professionals and their employers will not have to pay into UK’s National Insurance for assignments of up to five years. Around 75,000 workers and 900 employers will benefit from this.
The deal also opens up Britain’s government procurement market worth about £90 billion to Indian companies while India is opening up reciprocal procurement opportunities worth around $114 billion.
