Bank of Baroda Research estimates that India's exports to the UK could rise from $13.5 billion in FY26 to $24.2 billion by FY31 under the free trade agreement, as reported by NDTV Profit. The India-UK Comprehensive Economic and Trade Agreement (CETA), which came into force on July 15, is expected to provide a significant boost to Indian exporters by eliminating tariffs on nearly all exports to the UK. Bilateral trade could increase to $41 billion from $25.1 billion over the same period, with India's exports projected to grow at a faster pace than imports, widening the country's trade surplus with the UK. According to the research, India's exports are projected to grow at a faster pace than imports, widening the country's trade surplus with the UK.
A senior British official has confirmed that the India-UK Comprehensive Economic and Trade Agreement (CETA) officially came into effect today after years of negotiations and an over year-long implementation process. Harjinder Kang, the UK's Trade Commissioner for South Asia and British Deputy High Commissioner to Western India, told PTI that the deal will deliver 'tangible business outcomes' for both partner countries. The agreement represents a landmark pact that aims to double bilateral trade to $100-120 billion by 2030, with Kang expressing hope that the agreement will eventually lead to a jump in bilateral trade to USD 100 billion from the present USD 60 billion. An analysis suggests that the trading capacity will increase by GBP 25 billion through the deal, as reported by Business Standard. The CETA is the sixth FTA implemented by the Modi government, following pacts with Mauritius, the UAE, Australia, the European Free Trade Association, and Oman.
Telecom equipment emerges as the biggest beneficiary, with exports expected to jump to $3.59 billion by FY31 from $649 million in FY26, implying a CAGR of over 40%. According to Bank of Baroda Research, textile and apparel exports could rise to $3.1 billion from $2.1 billion over the next five years as the FTA removes the roughly 12% tariff previously imposed. Leather exports are projected to more than double to $900 million from $411 million by FY31 after import duties of up to 16% were eliminated. Gems and jewellery exports are expected to increase to $1.33 billion by FY31 from $702 million currently, while pharmaceutical exports could rise to $1.28 billion from $904 million due to the elimination of tariffs on drugs and pharmaceuticals. Motor vehicle exports are projected to rise to $492 million from $175 million by FY31, with engineering goods including electric machinery and transport equipment expected to see stronger demand.
The India-UK FTA represents a landmark agreement that aims to double bilateral trade to $100-120 billion by 2030, as reported by The Economic Times. The comprehensive pact extends beyond traditional trade, establishing rules for the digital economy, intellectual property, and services. Nearly 99% of the goods and services being exported by India to the UK, and 90% of the goods and services imported by the country will now attract lower or zero tariffs, according to UK Trade Commissioner Harjinder Kang. The agreement grants nearly 99.5% duty-free access for Indian exports to the United Kingdom, covering 98.8% of tariff lines, with Indian exporters receiving duty-free access for 99.5% of the value of India's exports to the UK. India, in turn, has offered preferential market access covering 89.5% of its tariff lines for tariff liberalization covering 91% of UK's exports, with India offering 89.5% of its tariff lines for tariff liberalization covering 91% of UK's exports. The agreement opens India's government procurement market to UK suppliers for the first time, while the UK has committed market access across 137 services sub-sectors, including information technology, financial services, professional services, telecommunications, education and business services.
UK officials have provided reassuring signals to India regarding security cooperation, with diplomatic sources confirming that the UK takes India's concerns over national security and financial fugitives very seriously. According to The Times of India, the remarks are particularly reassuring for India as it expects greater geopolitical alignment with London in the wake of the game-changing Comprehensive Economic and Trade Agreement (CETA), especially over core issues like extradition of fugitives, national security and counterterrorism. British High Commissioner Lindy Cameron described the India-UK free trade agreement as the new gold standard of trade deals, calling it pro-worker, pro-innovation and pro-growth. These developments come after PM Narendra Modi had stressed the significance of not allowing extremist ideologies – an allusion to Khalistan separatists active in the UK - to misuse democratic freedoms and backed ongoing efforts for extradition of economic offenders.
As reported by the source, the Double Contributions Convention (DCC) aims to support business and trade by ensuring that employees moving between the UK and India, and their employers, will only be liable to pay social security contributions in one country at a time. According to Commerce Secretary Rajesh Agrawal, "Indian employees in the UK spend 25% of their salaries in social security to the UK and that this is like a sunk cost for certain employees. After the FTA comes into effect, employees would be able to pay their social security payments in India and avoid double payments." The DCC exempts eligible Indian professionals on temporary assignments in the UK for up to three years from making National Insurance contributions there while continuing to contribute to India's social security system. According to the commerce ministry, the measure is expected to benefit more than 75,000 Indian professionals and around 900 employers, resulting in annual savings of over $600 million. The accompanying Double Contribution Convention extends social security exemptions for Indian professionals on temporary assignments in the UK from three years to five years, eliminating the need for dual social security contributions and lowering costs for both employees and employers.
