The India-UK Comprehensive Economic and Trade Agreement (CETA) went into force this week, marking a significant milestone in bilateral trade relations. The deal, signed in July 2025 after extensive negotiations, is expected to enhance bilateral trade by £25.5 billion annually by 2040, according to the Indian government.
Key Details
Under the CETA, 99% of Indian exports will gain duty-free access to the UK market, while India will benefit from concessions on 89.5% of British tariff lines. This framework is anticipated to provide immediate advantages to sectors where both countries hold strong export positions. For example, UK-prepared foodstuffs are projected to save £213 million annually in duties, representing the largest tariff saving across any UK export sector.
Indian textile exporters are expected to save up to £100,000 per £1 million in shipments to the UK due to zero-duty access. This change is likely to enhance their competitiveness against countries like Bangladesh and Vietnam, while also reducing costs for British consumers. The textile sector is a major employer in India and a significant contributor to its export earnings, making the CETA particularly impactful for this industry.
Background
The agreement aims to foster deeper industrial collaboration and integrate supply chains between the two nations. Its provisions allow materials from one country to be considered as originating from the other, encouraging the development of integrated value chains rather than mere trade.
The CETA is likely to positively influence sectors such as textiles and food and beverages, enhancing export opportunities for Indian firms and potentially lowering prices for UK consumers. Investors will watch for the impact of this agreement on trade volumes and sector performance in the coming months.