India and the United Kingdom’s Comprehensive Economic and Trade Agreement (CETA) has come into effect, cutting tariffs on thousands of goods and increasing access for service firms in both countries.

The agreement, which took effect on Wednesday, is expected to grant Indian exporters immediate duty-free access to most British tariff categories, benefiting labour-intensive industries such as textiles.

Conversely, the UK will secure broader access to Indian markets through gradual tariff reductions and quotas across sectors such as automobiles.

In a post on X, India’s Commerce and Industry Minister Piyush Goyal said the agreement was a “defining milestone in India-UK ties”.

The India-UK FTA offers exceptional prospects for our textiles, leather, gems and jewellery, engineering products, marine goods, chemicals, processed foods, MSMEs, farmers and manufacturers," he said. "

It also unlocks fresh avenues for our IT, professional, financial, education and business services industries, while enhancing mobility for Indian professionals.

How important is this trade agreement?

The agreement is projected to boost India’s exports to the UK while reducing the cost of imports for Britain.

A policy document released by the British government on Wednesday praised CETA, claiming it had achieved the most favorable agreement any nation has ever concluded with India.

Under this agreement, India will eliminate or lower tariffs—including those already at zero—on 90 percent of tariff lines, encompassing 92 percent of current goods imports from the UK, based on 2022 trade data, the policy paper stated.

At the same time, the UK will immediately eliminate duties on 96.8 percent of tariff categories, accounting for 97.7 percent of its trade value.

However, the true importance of the agreement lies in the UK’s decision to eliminate tariffs on nearly all Indian products.

India will immediately eliminate duties on 64.1 percent of tariff lines and gradually reduce tariffs on an additional 21 percent, while keeping sensitive products exempt.

Data from India’s Ministry of Commerce and Industry shows that the country exported goods worth $13.44 billion to the UK in the 2025-26 financial year, while imports amounted to $11.68 billion.

In 2024, bilateral trade in services reached $35.44 billion, with India recording a services surplus of about $7.9 billion, according to figures cited by Reuters.

In a post on X on Wednesday, Indian Prime Minister Narendra Modi said the two countries’ “economic linkages are going to get even deeper”.

Which British goods have become more affordable for Indian consumers?

The British policy paper states that items such as cosmetics, whisky, chocolate, soft drinks, and lamb will become more affordable and gain from the reduction in tariffs.

The agreement is also anticipated to advantage manufacturing industries, such as those producing automobiles, electrical circuits, premium optical equipment, and medical devices.

The agreement also covers market access and will allow Indian employees who relocate to the UK for short-term work assignments to avoid paying National Insurance contributions for a period of five years.

Minister Goyal also stated that more than 75,000 professionals and over 900 companies are expected to benefit from CETA as it comes into force. He added that sectors including IT, ITeS, financial, professional, healthcare, education, engineering, telecommunications, and consultancy services stand to gain.

Which Indian products are currently less expensive in the UK?

Tariffs on marine exports, textiles, leather, footwear, and gems and jewellery will be abolished, enabling Indian suppliers to compete more effectively in the UK market.

Under the agreement, the prices of spices, vegetables, processed foods, and fruits in the UK will also decrease.

However, the agreement does not include poultry, eggs, sugar or dairy and India has also removed apples, walnuts, and certain types of gold bars and smartphones from the list.