The Comprehensive Economic and Trade Agreement between India and the United Kingdom officially commenced on Wednesday, marking a significant milestone in trade relations by reducing tariffs on a multitude of products. This landmark deal is poised to open up new avenues for businesses and professionals across both nations.
For Indian exporters, the agreement provides duty-free access to a majority of British tariff lines, greatly benefiting industries such as textiles, leather, footwear, marine products, gems and jewellery, and processed foods. By eliminating tariffs that previously ranged from 4% to 20%, Indian officials anticipate a boost in exports due to enhanced competitiveness. Simultaneously, Britain stands to gain greater access to India’s burgeoning economy through phased tariff reductions and quotas, particularly in the automobile and silver sectors. Additionally, the pact expands opportunities in procurement, financial services, insurance, education, and professional services.
The agreement stipulates that Britain will abolish duties on 96.8% of tariff lines, accounting for 97.7% of trade by value, effective immediately. India, on the other hand, will remove tariffs on 64.1% of tariff lines right away and will gradually phase out duties on an additional 21%, ensuring protection for sensitive sectors. The trade relationship between the two countries has been on an upward trajectory, with India exporting $13.44 billion worth of goods to Britain and importing $11.68 billion during the 2025-26 fiscal year. In 2024, bilateral services trade reached $35.44 billion, with India enjoying a services surplus of nearly $7.9 billion.
Among the sectors expected to benefit significantly from the agreement is India’s engineering industry. Exports of engineering goods to Britain amounted to $4.7 billion in 2025-26, and industry leaders project this figure to surpass $7.5 billion by 2029-30. The services component of the deal encompasses 137 sub-sectors, including information technology, telecommunications, finance, business services, and education. Furthermore, the agreement simplifies temporary entry rules for business travelers, investors, and professionals.
An associated Double Contribution Convention offers exemptions for eligible Indian professionals and employers from contributing to Britain’s National Insurance system for up to five years, a provision that is expected to benefit approximately 75,000 workers and 900 employers. The agreement also unlocks government procurement opportunities in both countries, granting Indian firms access to contracts in Britain while creating reciprocal opportunities for British businesses in India.