The India-UK Comprehensive Economic and Trade Agreement (CETA) and the accompanying Agreement on Social Security came into force on July 15, 2026, nearly a year after they were signed in London. Under the agreement, the UK immediately eliminated import duties on nearly 99% of Indian exports, covering almost the entire value of India’s goods trade with Britain. On the first day alone, Indian exporters shipped goods worth over $140 million across sectors such as textiles, gems and jewellery, engineering products, and marine goods.
The Journey to CETA
India and the UK launched negotiations for a free trade agreement under the Enhanced Trade Partnership in January 2022. After 14 formal rounds of negotiations and more than 800 technical sessions, the deal was finally signed on July 24, 2025, by Prime Minister Narendra Modi and UK Prime Minister Keir Starmer in London. The agreement was presented to the UK Parliament in January 2026 and debated in the House of Commons in February before both countries completed their domestic ratification processes.
CETA is the sixth free trade agreement implemented by the Modi government, following pacts with Mauritius (CECPA, 2021), UAE (CEPA, 2022), Australia (ECTA, 2022), EFTA (TEPA, 2024), and Oman (CEPA, 2025). The British government has described CETA as the most ambitious trade deal any country has ever concluded with India, while Indian officials have called it one of the most aspirational FTAs India has ever signed.
The implementation was briefly delayed due to a dispute over UK steel safeguard measures announced in March 2026. The UK had imposed fresh steel curbs that affected 188 steel items worth $137 million in Indian exports. Both sides resolved the matter in mid-June 2026, with the UK agreeing to enhanced country-specific quotas and exclusive access under an Authorised Use Scheme.
What CETA Delivers for India
The most significant gain for India under CETA is the immediate elimination of UK import duties on 96.8% of tariff lines, covering 97.7% of trade value. When fully implemented, this covers 98.8% of tariff lines and 99.5% of trade value, giving Indian exporters near-complete duty-free access to the British market.
Zero-Duty Access Across Key Sectors
Labour-intensive sectors that previously faced UK tariffs of up to 70% are now at zero duty:
| Sector | Previous UK Tariff | Benefit Under CETA |
|---|---|---|
| Textiles and clothing | Up to 12% | Zero duty from Day 1 |
| Leather and footwear | Up to 16% | Zero duty from Day 1 |
| Gems and jewellery | Variable | Zero duty from Day 1 |
| Marine products | Up to 21.5% | Zero duty from Day 1 |
| Engineering goods and auto components | Up to 18% | Zero duty from Day 1 |
| Processed food products | Up to 70% | Zero duty on 97.1% of tariff lines |
| Chemicals and pharmaceuticals | Up to 8% | Zero duty from Day 1 |
Agricultural products, except for poultry, eggs, pork, rice, and sugar, have also received zero-duty access. This gives Indian exporters a significant edge in the UK agricultural import market, which exceeds $90 billion annually.
Day One Impact
On July 15, 2026, over 50 export consignments valued at more than $140 million were flagged off from over 20 ports, airports, Inland Container Depots (ICDs), Special Economic Zones (SEZs), and factories across India. These included shipments from Mundra, Nhava Sheva, Chennai, Mumbai (Sahar), Kolkata, and Hyderabad, covering products such as electronics, pharmaceuticals, textiles, and gems and jewellery. Flag-off ceremonies were held in multiple states including Gujarat, Maharashtra, Telangana, Karnataka, Punjab, and Rajasthan.
Double Contribution Convention: Relief for Indian Professionals
Alongside CETA, the Agreement on Social Security, formally known as the Double Contribution Convention (DCC), also came into force on July 15. This agreement addresses a long-standing grievance of Indian IT and services firms operating in the UK.
How the DCC Works
Previously, Indian employees sent to work temporarily in the UK and their employers had to contribute approximately 23% of salary towards the UK National Insurance system. Since most temporary workers stayed for less than the 10 years needed to qualify for UK social security benefits, these contributions were effectively lost. Under the DCC, eligible Indian workers sent to the UK on temporary assignments of up to 60 months (5 years) will be exempt from paying UK National Insurance contributions. Instead, they will continue contributing to India’s social security system through the Employees’ Provident Fund Organisation (EPFO), ensuring their retirement savings remain intact.
Beneficiaries and Savings
The government estimates that over 75,000 Indian professionals and more than 900 Indian companies will benefit from this arrangement. Annual savings for Indian firms and employees are estimated at approximately $600 million. The agreement significantly enhances the competitiveness of Indian IT majors such as Tata Consultancy Services (TCS) and Infosys, for which the UK is the second-largest export market. India’s services exports to the UK stood at $21.6 billion in 2024, with the IT sector contributing 17% of India’s total IT export basket.
In addition to the DCC, the UK has offered market access across 137 services sub-sectors covering IT, financial services, engineering, healthcare, education, and telecommunications. The agreement also provides dedicated annual mobility quotas for 1,800 Indian chefs, yoga instructors, and classical musicians.
India already has similar social security agreements with Belgium, Germany, Switzerland, France, Denmark, South Korea, and the Netherlands.
What the UK Gains from the Agreement
India has committed to removing or reducing tariffs on 90% of tariff lines, covering 92% of existing goods imports from the UK. Of this, 64.1% of tariff lines will become duty-free immediately, with another 21% phased out over time. In total, this covers 89.5% of tariff lines and 89.4% of trade value.
Automobiles
For the first time in any Indian FTA, the agreement provides for sharp reductions in import duties on UK-made fully-built cars and trucks. Current tariffs of 110% on passenger vehicles will be reduced to 10% in a phased manner over several years. India has agreed to allow the import of 3.78 lakh conventional-engine passenger cars from the UK at concessional customs duty during the first 15 years. However, electric, hybrid, and hydrogen passenger cars will receive preferential access only from the sixth year, giving India’s domestic EV industry five years of protection.
Trucks imported as fully-built units will see duties fall from 44% to 8.8% within a quota by Year 5.
Scotch Whisky and Alcoholic Beverages
One of the most visible benefits for UK exporters is the reduction in import duties on Scotch whisky. The current tariff of 150% will fall to 75% initially and then to 40% by the tenth year, subject to a minimum import price. Duties on other premium drinks including gin, rum, vodka, brandy, and tequila will also be lowered.
Silver
Silver is expected to be among the biggest gainers for UK exporters. India imported silver bars worth around $5 billion from the UK in FY2025-26. Under CETA, import duties on silver bars will be gradually phased out over 10 years.
Other British Exports
Products such as cosmetics, chocolates, soft drinks, salmon, lamb, machinery, electronics, and medical devices will benefit from tariff reductions, making them more competitive in the Indian market.
Items Excluded by India
India has protected sensitive sectors by excluding several products from tariff concessions. These include dairy products, cereals, millets, edible oils, oilseeds, apples, walnuts, specific categories of gold bars, and smartphones.
Steel Quotas and Government Procurement
Steel Trade Resolution
Steel trade had emerged as a major sticking point before the implementation of CETA. The UK’s steel safeguard measures, announced in March 2026, covered 188 steel items accounting for $137 million worth of Indian steel exports. After intensive negotiations, India secured enhanced market access. Indian exporters can now ship over 11 lakh tonnes of steel annually to the UK duty-free through a combination of country-specific quotas and the Authorised Use Scheme (AUS). The UK reserved an exclusive 40% of the AUS quota for India, translating to about 9.45 lakh tonnes of dedicated trade volume.
Government Procurement
CETA includes a chapter on government procurement, a first for India in a trade agreement. Indian suppliers will gain legal access to the UK government procurement market worth around £90 billion ($122 billion). In return, India offers reciprocal opportunities of around $114 billion to UK firms. However, four safeguards have been built in to protect Indian interests. First, only selected central government entities are covered, not state governments. Second, UK firms must meet a 20% UK-content threshold to qualify as Class 2 Local Suppliers. Third, UK firms are not allowed in strategic sectors. Fourth, a minimum threshold applies: UK firms can bid only for contracts valued above ₹5.5 crore (₹60 crore for construction contracts).
On intellectual property, India has ensured that the agreement does not restrict its right to use compulsory licensing, a critical tool for accessing life-saving technologies during emergencies.
India’s Expanding FTA Network
CETA is part of a broader strategy by India to expand its global trade footprint through a new generation of comprehensive free trade agreements. According to the government, India has concluded nine FTAs spanning 38 countries in the past six years. After signing CETA with the UK, India went on to announce or conclude FTAs with New Zealand (December 2025) and the European Union (January 2026), and has delivered a framework for an interim agreement with the United States (February 2026).
The UK is India’s 11th largest trading partner, with bilateral trade (goods and services) standing at approximately $55-60 billion in FY2025-26. India exported $13.44 billion worth of goods to the UK in FY2025-26 while importing $11.68 billion. Bilateral services trade was estimated at $35.44 billion in 2024, with India enjoying a services surplus of nearly $7.9 billion. The government has set a target of increasing total bilateral trade to $100 billion by 2030.
Key Takeaways
- The India-UK Comprehensive Economic and Trade Agreement (CETA) and the Agreement on Social Security came into force on July 15, 2026, after being signed on July 24, 2025.
- The UK eliminated import duties on 96.8% of tariff lines (covering 97.7% of trade value) immediately, giving Indian exporters near 99% duty-free access to the British market.
- Indian exporters shipped goods worth over $140 million on the first day of implementation from more than 20 ports and airports across the country.
- The Double Contribution Convention (DCC) exempts Indian professionals on temporary UK assignments of up to 5 years from paying UK National Insurance, benefiting over 75,000 professionals and 900 companies with estimated annual savings of $600 million.
- India secured enhanced steel market access with over 11 lakh tonnes of duty-free annual quota, including an exclusive 40% share of the UK’s Authorised Use Scheme.
- CETA is India’s sixth FTA under the Modi government and is part of a broader strategy that has seen nine FTAs spanning 38 countries concluded in recent years.
- India protected sensitive sectors including dairy, cereals, apples, gold bars, and smartphones from tariff concessions while securing safeguards for government procurement and compulsory licensing.
