India-UK Trade Pact Takes Effect: Telangana Set to Gain from Zero Tariffs on Key Exports
The India-UK Comprehensive Economic and Trade Agreement (CETA) came into force on Wednesday, July 15, 2026, positioning Telangana as a key beneficiary due to its strong export base in pharmaceuticals, electronics, and chemicals. The agreement eliminates or reduces tariffs on a wide range of products, enhancing market access and simplifying customs procedures.
Telangana exported goods worth $402.5 million to the UK in the fiscal year 2025-26. Major exports include drug formulations and biologicals ($116.4 million), electronic instruments ($110.4 million), residual chemicals ($30.2 million), electrical machinery ($24.3 million), construction machinery ($15.3 million), and organic chemicals ($13.4 million). The state also exports bulk drugs, electronics components, optical and medical instruments, and specialty chemicals.
The Industries Department marked the agreement's enforcement by flagging off export consignments to the UK. Previously, textiles faced tariffs up to 12%, leather products up to 16%, gems and jewellery up to 4%, chemicals between 4% and 8%, and machinery between 8% and 14%. Under CETA, these duties become zero, making Telangana's goods more competitive in the UK market.
Sectors expected to benefit include pharmaceuticals and life sciences; electronics and precision engineering; engineering goods and industrial machinery; and chemicals and specialty chemicals. The agreement is likely to enhance the competitiveness of state exporters, encourage MSME participation in global value chains, and attract investments in export-oriented manufacturing. It may also strengthen collaboration in pharmaceuticals, digital technologies, electronics, and advanced manufacturing, while generating employment through export-led growth.
Though currently a smaller share, processed foods, rice, spices, fruits, essential oils, and value-added agri-products also have significant growth potential under the agreement.
