India-UK Free Trade: From textile traders to whiskey lovers, whose fortunes will shine with the India-UK agreement?

India-UK Free Trade Agreement: The Free Trade Agreement between India and the United Kingdom is going to come into effect from July 15, 2026. After the tariff cut, Scotch whisky, gin, biscuits, chocolates, cosmetics and many other British products will become cheaper in the country. However, there are some products where the cuts will be implemented gradually. Following the agreement between the two countries, Indian exporters will get almost complete tariff-free access to the UK markets.

Nearly 99 per cent of the tariff lines will have zero-duty facility, covering almost the entire export value of India. It is noteworthy that the Comprehensive Economic and Trade Agreement (CETA) between India and the UK was signed on July 15, 2025, which is coming into force after a year.

How beneficial is the agreement for India?

This agreement was agreed after 14 rounds of long talks between the two countries. Under this, due to reduced duty on many types of products and access to the market, businesses trading between India and the UK are expected to get more certainty. Apart from tariff reduction, many other things have been included in this 30-chapter agreement. Sectors like digital trade, telecommunication, financial services, innovation, sustainability, intellectual property, transparency and government procurement have been included in it.

Indian professionals working in the United Kingdom will also benefit from social security relief as the Double Contribution Convention also comes into effect from July 15. This will also exempt eligible temporary professionals from paying social security contributions in both the countries for a limited period of time.

What is the total trade between India and UK?

• This deal has been made at a time when mutual trade between the two countries has increased, although in 2025-26, with London India’s trade surplus (export-import difference) reduced significantly because imports grew faster than exports.
• According to Commerce Ministry data, goods trade between the two countries is expected to increase from $17.48 billion in 2021-22 and $23.13 billion in 2024-25 to $25.13 billion in 2025-26.
• India’s exports to the UK stood at $13.44 billion in 2025-26, up from $14.55 billion in 2024-25. That year, the UK’s share in India’s total goods exports was 3.04 percent.
• Imports from the UK are set to increase sharply to $11.68 billion in 2025-26 from $8.58 billion a year ago, an increase of 36.11 percent.
• As a result, India’s trade surplus with the UK declined to $1.76 billion in 2025-26, compared to $5.97 billion in 2024-25.

Textile sector will benefit

by this agreement Indian exports India will get major relief from customs duties on almost 99 per cent of tariff lines, covering almost 100 per cent of the total trade value. Its biggest benefit will be to labour-intensive sectors like textiles, marine products, leather, footwear, sports goods, toys and gems and jewellery, where employment is available on a large scale.

Additionally, key export products such as engineering goods, auto parts, engines and organic chemicals will also get greater access and better opportunities in the British market. Removal of tariff related barriers will strengthen the competitiveness of Indian exporters, which will enable them to give tough competition in the UK market to suppliers from countries who are already getting special concessions there.

85 percent products will be duty free

Under the agreement, India will either reduce or completely eliminate customs duties on about 90 per cent of tariff lines, with 85 per cent of products becoming completely duty-free over the next decade. This historic agreement will provide immediate relief of around £400 million in tariffs on British exports to India, which will reach around £900 million annually once fully implemented.

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On the other hand, the duty imposed on goods (import) sent from India to Britain is also expected to be reduced by about 220 million pounds, which will give a new and stronger direction to the bilateral trade of both the countries.