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Comprehensive Economic and Trade Agreement (CETA) between the United Kingdom of Great Britain and India

Date of publication: August 5, 2025
On 24 July 2025, the United Kingdom and India signed the Comprehensive Economic and Trade Agreement (CETA), a landmark moment in global trade and bilateral relations. Alongside CETA, both nations agreed to a Double Contributions Convention (DCC) on social security, to be implemented in tandem. Lauded as India's most favourable trade deal to date, this historic pact is expected to accelerate economic growth, enhance strategic cooperation, and unlock vast new opportunities for UK businesses.

Strategic rationale and economic context

India stands out as one of the world's most dynamic economies, boasting the highest G20 growth rate (projected to exceed 6% for at least the next five years). As the UK’s 12th largest trading partner in 2024 (with £43 billion in total trade), India’s economic trajectory is compelling. It recently became the world’s fifth-largest economy, projected to rise to third by 2028, with its middle class potentially expanding to 250 million by 2050 and import demand soaring to £1.4 trillion by 2035.
Despite challenges like high average tariffs and services market restrictions, UK businesses are optimistic, with 72% indicating that a trade agreement would encourage market exploration. India's booming manufacturing sector, expected to comprise 21% of its GDP by 2031, further solidifies its appeal.

Expected economic impact

CETA is projected to deliver substantial economic benefits:
  • Bilateral trade:
     An increase of £25.5 billion per year, including £15.7 billion from increased UK exports to India.
  • UK GDP:
    A growth of £4.8 billion annually (a 0.1% increase).
  • UK wages:
    An estimated rise of £2.2 billion per year for UK workers.
  • Tariff savings:
    Immediate savings of up to £400 million per year for UK products, potentially rising to £900 million after 10 years.

Sectoral and regional gains

CETA delivers broad-based advantages across industries and UK regions.
Iconic UK exports
:
  1. Whisky: Tariffs down from 150% to 75% on day one, further to 40% in 10 years.
  2. Tariff cuts include gin, cosmetics, lamb, medical devices, automotives.
Services access:
 UK service providers gain assured entry into India's expanding market, notably in Telecom, construction, financial, professional sectors gain guaranteed Indian market entry.
Regional highlights
: The agreement boosts specific UK regions and their key exports:
  1. Scotland: Beverage exports
  2. Northern Ireland: Services
  3. Wales: Lamb exports
  4. England: Automotive and logistics

Key components and provisions

The agreement encompasses a comprehensive set of provisions across various components:
  • Trade in goods:
     India commits to removing or reducing tariffs on 90% of tariff lines (covering 92% of UK exports by value), with 64% gaining immediate tariff-free access, significantly boosting UK exports and impacting imports into India. Major wins include reduced tariffs on UK whisky, gin, automotives, cosmetics, and agri-food.
  • Digital trade:
    Reduces barriers to digital trade, recognizes electronic contracts, protects against forced source code transfer, and enhances consumer digital safety.
  • Customs and trade facilitation:
    Aims for faster (48-hour) and non-discriminatory customs processing, with simplified paperwork and online access to customs laws.
  • Rules of origin & remedies:
    Establishes flexible rules to benefit UK producers and includes provisions for trade remedies (e.g., anti-dumping, safeguards) to protect domestic industries.
  • Sanitary and phytosanitary (SPS) measures:
    Facilitates trade while safeguarding human, animal, and plant health and maintaining high food safety standards.
  • Remedies:
    Provides trade remedies (e.g., anti-dumping, safeguards) and a mechanism for temporary tariffs to protect domestic industries if imports surge and threaten local businesses.
  • Subsidies:
    Builds on WTO rules for transparency and fairness in subsidies, which can impact the competitiveness of imports and exports.
  • Telecommunications:
    Guarantees fair and competitive access for UK telecoms suppliers in India, supporting the export of UK telecommunications services.
  • Dispute settlement:
    Establishes a mechanism for fair and timely resolution of trade disputes, providing stability for both import and export activities.
  • Intellectual property (IP):
    Strengthens protections for copyright, patents, trademarks, and geographical indications, ensuring faster patent procedures and higher standards for UK GIs.

Next steps towards entry into force

Before the FTA officially enters into force, several key steps remain: finalization of the legal text and signing by both parties, review by the UK’s independent Trade and Agriculture Commission (TAC) for consistency with statutory protections, parliamentary scrutiny under the Constitutional Reform and Governance (CRaG) Act, and the introduction and passage of necessary domestic legislation. Once in effect, UK businesses and citizens can fully capitalize on the agreement’s benefits.

Conclusion

The UK-India FTA is a landmark agreement poised to significantly deepen the strategic partnership between two major global economies. By reducing trade barriers, unlocking new market access, and setting high standards across various sectors, it aims to foster sustained economic growth and prosperity for both the UK and India.
These changes are not yet reflected in ONESOURCE Global Trade Content, as this is an upcoming trade agreement.
For more information on how ONESOURCE Global Trade solutions can assist you in managing trade agreements, please contact your Account Manager or Customer Success Manager.