India-UK Trade Pact Takes Effect: Tariff Cuts, Social Security Deal Unlock New Opportunities
The India-UK Comprehensive Economic and Trade Agreement (CETA) came into force on Wednesday, reducing tariffs on 99 per cent of Indian goods entering the UK and 90 per cent of UK goods entering India. The agreement, signed in July last year, also includes a Social Security Agreement that exempts Indian professionals on temporary UK assignments of up to 60 months from making social security contributions in both countries.
Prime Minister Narendra Modi described the operationalisation as "a significant moment in the India-UK partnership." In a post on X, he said the trade pact would provide fresh momentum to farmers, entrepreneurs and micro, small and medium enterprises (MSMEs), while giving several sectors "stronger access" to the UK market. He added that the agreements reflect "the trust between our democracies and our resolve to build a forward-looking partnership driven by trade, technology, investment and innovation."
British High Commissioner Lindy Cameron called CETA "the new gold standard of trade deals: pro-worker, pro-innovation, and pro-growth." She highlighted specific tariff reductions, including a cut in import duty on Scotch whisky from 150 per cent to 75 per cent, and a reduction on premium UK-built cars from over 110 per cent to 10 per cent. "This should make a really significant difference to the price the consumer pays," she said.
The agreement benefits a wide range of sectors on both sides, including automotive, manufacturing, consumer goods, creative industries and medical technology. It lowers tariffs across textiles, leather, gems and jewellery, engineering goods, marine products, pharmaceuticals and processed food, while expanding market access for services, digital trade and government procurement.
According to government data, merchandise trade between India and the UK stood at US$ 25.1 billion in 2025-26, while bilateral services trade was US$ 35.4 billion in 2024. The agreement is expected to at least double bilateral trade from the current level of about 48 billion pounds annually by 2030, boosting long-term economic growth in both countries.
UK Minister for Trade Chris Bryant said the deal "sends a message to the rest of the world that the rules-based order works." To celebrate the occasion, a special package of British goods, including cosmetics, food products and alcoholic beverages, arrived at the British Deputy High Commission in Mumbai aboard a British Airways flight.
