When the clock strikes midnight on 15 July, it will signal more than the implementation of a free trade agreement. It marks the beginning of a new economic relationship between two countries linked by history but increasingly united by shared commercial ambitions.
After nearly four years of negotiations, the landmark Comprehensive Economic and Trade Agreement (CETA) comes into force with expectations of transforming bilateral trade. For Britain, the agreement represents one of the most significant achievements of its post-Brexit trade strategy. For India, it opens the doors to one of the world's largest consumer markets with unprecedented preferential access.
Shehla Hasan, Director and Head-UK, Confederation of Indian Industry (CII), described the UK-India Comprehensive Economic and Trade Agreement (CETA) as the beginning of a "new, modern and equal 21st-century partnership" between the two countries.
“Each chapter in the Free Trade Agreement (FTA) is exciting and serves as a crucible of new ideas for collaboration, co-creation, innovation, and cooperation. It sets a higher bar for trusted importers, exporters, and supply chains”, she said.
“This impact and change will be felt for the better. Whether you are a confectionery manufacturer in Scotland, a fruit grower in the Northeast of India, a textile manufacturer in Surat, or a cosmetics manufacturer in West London, you will feel the change and the benefits of this iconic agreement”, she further added
Calling this FTA a personal and professional milestone after 18 years working on the UK-India economic corridor, Hasan congratulated both governments and business communities, expressing optimism that the landmark agreement would strengthen bilateral trade and create lasting economic opportunities.
The India–UK partnership gathered unprecedented momentum over the past year. Prime Minister Narendra Modi's visit to Britain on 23–24 July 2025 culminated in the landmark Comprehensive Economic and Trade Agreement (CETA), alongside the adoption of the India–UK Vision 2035 and a Defence Industrial Roadmap. Momentum continued in October, when UK Prime Minister Sir Keir Starmer led a high-profile delegation of ministers, business leaders, academics and cultural figures to India, underscoring both nations' commitment to deepening strategic, economic and people-to-people ties.
In a recent conversation with Asian Voice, Peter Kyle, Secretary of State for Business and Trade, talks about the relationship between the countries. He said, “Once this agreement is in place, we will continue to explore new opportunities for collaboration. The world is changing rapidly, with significant disruptions affecting the global economy, and it is important that our two countries are well positioned to respond and seize new opportunities as they emerge.
“I am confident that the close relationship I have with my counterpart, Commerce Minister Piyush Goyal, together with the strong partnership between our two Prime Ministers, will continue to grow. That will enable the UK and India to build on this agreement and identify further areas for cooperation and shared prosperity in the years ahead.”
Lower tariffs, bigger opportunities
Industry body ASSOCHAM estimates that trade between the two nations could almost double, from around $58 billion in FY26 to nearly $120 billion by 2030, creating new opportunities for businesses, investors and consumers on both sides.
The agreement eliminates tariffs on 99% of India's exports to the UK, while India will gradually remove duties on 89.5% of its tariff lines covering British goods. The reduced trade barriers are expected to benefit a wide range of industries. Indian exporters in textiles, garments, leather, gems and jewellery, engineering goods, chemicals and seafood are poised to gain from duty-free access, while British companies in automobiles, premium beverages and spirits, healthcare and life sciences are expected to enjoy significantly improved entry into the Indian market.
Calling the pact a "historic milestone", ASSOCHAM President Nirmal K Minda said the agreement brings together two of the world's oldest democracies under a comprehensive economic partnership that will strengthen supply chains, encourage investment and generate wider economic benefits.
Tariff cuts alone will not guarantee success
Yet experts caution that tariff reductions alone will not guarantee success.
The Global Trade Research Initiative (GTRI) argues that India's real challenge begins now. Founder Ajay Srivastava said the agreement "opens the door", but India must convert market access into actual exports by strengthening quality standards, certification systems, logistics, regulatory compliance and buyer networks.
Different sectors will face different hurdles. Food exporters must satisfy the UK's stringent safety, traceability and labelling requirements, while engineering and electronics manufacturers will need internationally recognised certifications. Automobile exports will depend on meeting rules of origin and technical standards, and apparel manufacturers are being urged to capitalise quickly before global competitors adjust.
Where the biggest gains and challenges lie
GTRI notes that although Britain imported goods worth nearly $929 billion in 2025, India accounted for just $15.2 billion, only 1.6% of that market. Processed food presents one of the biggest untapped opportunities, with the UK importing $33.4 billion worth annually while sourcing only $354 million from India.
However, the think tank also highlights sectors where gains may remain limited. Pharmaceuticals and chemicals will continue to face regulatory barriers beyond tariffs, while UK safeguard measures on steel and intense international competition in alcoholic beverages could restrict export growth.
For Indian MSMEs, the real challenge begins after tariff cuts
While, the CETA opens the door to one of the world's largest consumer markets, for India's micro, small and medium enterprises (MSMEs), duty-free access is only the beginning. The real test lies in competing with established manufacturing powerhouses such as China, Bangladesh and Vietnam, which already enjoy strong supply chains and long-standing relationships with British buyers.
The UK imported goods worth nearly $929 billion in 2025, yet India's share was only around $15 billion, or 1.6% of Britain's merchandise imports. While bilateral goods trade reached $23.1 billion in FY25, up from $21.3 billion a year earlier, experts caution that lower tariffs alone will not guarantee higher exports. Indian businesses must also compete on pricing, product quality, delivery speed, regulatory compliance and sustainability standards.
The biggest gains are expected in textiles and apparel, with the removal of duties of up to 12%, boosting India's competitiveness in the UK market. Gems and jewellery, processed foods, engineering goods and auto components are also poised to benefit from lower tariffs.
However, exporters must still meet strict UK standards on food safety, product quality, technical regulations and rules of origin. Growing sustainability requirements and carbon-related regulations could also increase compliance costs, creating fresh challenges, particularly for smaller businesses and steel exporters.
While CETA provides Indian MSMEs with unprecedented market access, but long-term success will depend on improving competitiveness, embracing global quality standards and strengthening logistics and compliance.
