India-UK CETA to increase bilateral trade to $100 billion by 2030; engineering, textiles among the biggest gains | Today’s news

New Delhi: India’s Comprehensive Economic and Trade Agreement (CETA) with the UK, which will come into effect on Wednesday, is expected to boost bilateral trade to $100 billion by 2030, opening significant opportunities for exporters in engineering goods, textiles and apparel, leather, gems and jewellery, chemicals, marine products and services, the Union Commerce Ministry said.

Commerce Minister Rajesh Agrawal called it one of India’s most ambitious trade pacts and said Ceta sets the “gold standard” with its broad sectoral coverage and deep commitments on both tariff and non-tariff measures. Unlike conventional FTAs ​​that primarily focus on tariff liberalization, the India-UK Ceta covers 30 chapters and covers areas such as digital trade, government procurement, innovation, labour, environment and gender equality, while maintaining safeguards for sensitive Indian industries.

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Under the deal, Indian exporters will get duty-free access to 99.5% of the value of Indian exports to the UK, which will cover 98.8% of tariff items, effectively eliminating tariffs across a range of labour-intensive and manufacturing sectors. In turn, India has offered preferential market access covering 89.4% of the value of UK exports, with tariff reductions being phased in for sensitive products. The agreement is expected to substantially improve the competitiveness of Indian exports in one of the world’s largest developed markets.

Deeper economic engagement

The Commerce Department expects the deal to significantly deepen economic engagement between the world’s fifth- and sixth-largest economies. India-UK trade in goods was estimated at $25.12 billion in 2025-26, with India’s exports at $13.44 billion and imports at $11.68 billion. Bilateral trade in services was valued at $35.44 billion in 2024, with India maintaining a surplus in services trade of $7.88 billion.

The engineering industry is expected to be one of the biggest beneficiaries of the deal. The UK imports engineering goods worth nearly USD 193.5 billion annually, while India’s exports to the market currently stand at around USD 4.28 billion, indicating significant untapped potential. The abolition of the duty is expected to boost exports of automobiles, auto components, motorcycles, industrial machinery, iron and steel products, aluminum products and engineering equipment, while enhancing the participation of Indian manufacturers and SMEs in global value chains. Manufacturing hubs in Tamil Nadu, Maharashtra, Gujarat, Karnataka, Uttar Pradesh and Telangana are expected to benefit from this.

The textile and apparel sector is also poised for a significant recovery. The deal removes UK tariffs of up to 12% across 1,143 tariff items, increasing India’s competitiveness against Bangladesh, China, Pakistan, Vietnam, Cambodia and Turkey. The UK imports about $28.8 billion worth of textiles and clothing annually, while India’s exports remain relatively modest, leaving considerable room for expansion. Export oriented clusters in Tiruppur, Surat, Ludhiana, Panipat, Bhadohi and Moradabad are expected to benefit from this.

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The agreement also provides immediate duty-free access for leather and footwear, gems and jewellery, chemicals, plastics, rubber products, electrical machinery, marine products and several agricultural exports. Leather and footwear exporters will benefit from the elimination of tariffs of up to 16%, while seafood exporters will gain from the complete elimination of tariffs on the UK’s seafood market, worth almost $4.9 billion. The gems and jewelery sector will similarly benefit from the removal of duties of up to 4%, improving India’s competitiveness in the UK premium retail market.

Agricultural and processed food exporters are expected to gain wider market access as the UK removes tariffs on virtually all agricultural products, except for a limited number of sensitive items. The agreement provides duty-free access to 97.3% of processed food items, benefiting exports of fresh fruits and vegetables, cereals, bakery products, processed foods, natural honey and value-added food products. The Department of Commerce estimates that Indian exporters will gain better access to the UK’s over $90 billion agricultural and processed food market.

In addition to trade in goods, Ceta gives India the most comprehensive access to the services market of any UK trade agreement. The UK has committed to market access in 137 services sub-sectors, including information technology, financial services, professional services, telecommunications, education and business services. It also facilitates mobility for business visitors, intra-company transferees, contracted service providers, investors and independent professionals, while promoting mutual recognition of professional qualifications.

Game switcher for services

A key element accompanying the deal is the Double Contribution Convention (DCC), which Commerce Secretary Agrawal has described as a “game changer” for India’s services sector. This arrangement exempts eligible Indian professionals on secondment to the UK for up to five years from paying national insurance contributions in that country, while continuing to contribute to the Indian social security system. According to the Commerce Department, more than 75,000 Indian professionals and around 900 employers are expected to benefit from the measure, resulting in annual savings of over $600 million.

The agreement also opens up access for Indian businesses to the UK’s estimated £90 billion ($122 billion) government procurement market, while maintaining policy space for sensitive sectors such as dairy, rice, sugar and automobiles through calibrated tariffs and exemptions.

Industry experts said the deal will boost India’s export competitiveness by reducing trade costs and improving regulatory certainty.

“As the India-UK FTA comes into force, businesses on both sides will benefit from better market access, lower trade costs and greater certainty in trade in goods and services,” said Agneshwar Sen, head of trade policy at EY India.

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Sen said sectors including textiles and apparel, leather and footwear, gems and jewellery, engineering goods, auto parts, chemicals, agriculture, marine products and IT, financial and professional services should benefit the most. He added that the agreement is one of India’s first major trade pacts with a developed economy to become operational in recent years and will help Indian businesses become more familiar with advanced regulatory standards, compliance requirements and trade facilitation processes.

“However, realizing these benefits will depend on effective implementation, adherence to rules of origin requirements and the ability of businesses to align their supply chains and compliance frameworks,” Sen said, adding that the agreement also reflects India’s increasingly proactive trade strategy and its ambition to deepen integration into global value chains.

Agrawal said the government’s immediate focus will now shift from negotiation to implementation to ensure that Indian exporters start reaping the benefits of the deal from day one. He said the pact is designed to create opportunities across the economy – from farmers, fishermen and workers to small and medium enterprises, women entrepreneurs and start-ups – while strengthening India’s integration with global value chains and expanding its presence in one of the world’s most important developed markets.