India-UK Comprehensive Economic & Trade Agreement
The India–UK Comprehensive Economic and Trade Agreement (CETA) was signed on 24 July 2025, capping negotiations that accelerated after talks resumed in 2022. The treaty combines broad tariff liberalisation, services and investment commitments, and mobility and regulatory-cooperation provisions intended to deepen a bilateral relationship between two large economies.
Headline trade coverage and tariff changes. The agreement eliminates or reduces tariffs across the bulk of tariff lines on both sides. According to UK government summaries, 64% of UK tariff lines will be eligible for tariff-free access to India on entry into force, covering about £1.9 billion of current UK exports (based on 2022 data), with a larger share phased in over time (85%+ within a decade in other official summaries). Conversely, UK documents and independent advisers state that the UK agreed to remove tariffs on roughly 99% of Indian tariff lines, while India agreed staged cuts on around 90% of UK tariff lines – the precise share varies by product and staging.
Fiscal and tariff-saving estimates. The UK’s official impact assessment quantifies immediate and medium-term tariff savings: it estimates import duty reductions on UK exports to India of about £400 million immediately on entry into force, rising to £900 million after ten years when staging is complete. For the UK overall, the deal is projected to increase long-run GDP by 0.13% (≈ £4.8 billion per year); for India the long-run GDP uplift is estimated at 0.06% (≈ $5.1 billion per year). These macro estimates reflect general-equilibrium modelling that assumes full implementation of tariff, services and non-tariff commitments.
Sectoral specifics and politically sensitive lines. The agreement contains detailed, product-level treatments. India’s average tariff on UK products is reported to fall from ~15% to ~3% (average) over the course of implementation; certain high-tariff goods see very large cuts but with phase-ins. For example, spirits (notably Scotch whisky) face staged cuts – Indian duties that were as high as ~150% are reduced in phases (reported to fall to around 75% on entry, and further to ~40% over time in some schedules). Automobiles are treated with quotas and phased tariff reductions: tariffs for many cars will be cut to 10%, but under a quota system that limits volumes (the Financial Times and government documents detail multi-year quota ceilings and phased eligibility by vehicle type, with electric/hybrid quotas increasing over time).
Services, mobility and investment: quantified commitments. The services and investment chapters expand commitments in measurable ways: official texts and briefings increase the number of protected/covered services sub-sectors and include mutual recognition mechanisms for certain professional qualifications. Mobility measures expand the categories under the UK’s Global Business Mobility visa from 15 to 33 categories in practice for intra-company transfers and business visitors; an accompanying fiscal estimate suggested the NI exemption for some intra-company transferees could cost the UK Treasury ~£200 million per year under one analysis (a contested number politically). The deal also contains specific floors for foreign direct investment treatment and investor–state facilitation measures rather than broad investor-state dispute resolution.
Distributional and adjustment magnitudes. The headline GDP numbers mask heterogeneous impacts. The UK impact assessment warns of short-run redistribution: sectors exposed to Indian competition (textiles, some consumer goods) may face adjustment while UK consumers and export sectors gain. The modelling projects a substantial bilateral trade uplift – in the tens of billions of pounds over the long run – but does not claim uniform gains across sub-regions or industries. Implementation costs (customs systems, rules-of-origin verification, quota administration) are non-trivial and will require additional administrative capacity on both sides.
Conclusion (quantitative frame). The FTA’s numerical profile is: signed 24 July 2025; immediate tariff savings on UK exports ~£400m rising to ~£900m after ten years; projected long-run GDP uplift UK: 0.13% (~£4.8bn/year), India: 0.06% (~$5.1bn/year); 64% of UK lines tariff-free on entry (covering £1.9bn of UK exports), and tariff elimination on ~99% of Indian tariff lines per UK/industry summaries. These are the central quantitative takeaways, but sectoral quotas, staging timetables and services commitments mean outcomes will vary materially by industry and over time.
Headline trade coverage and tariff changes. The agreement eliminates or reduces tariffs across the bulk of tariff lines on both sides. According to UK government summaries, 64% of UK tariff lines will be eligible for tariff-free access to India on entry into force, covering about £1.9 billion of current UK exports (based on 2022 data), with a larger share phased in over time (85%+ within a decade in other official summaries). Conversely, UK documents and independent advisers state that the UK agreed to remove tariffs on roughly 99% of Indian tariff lines, while India agreed staged cuts on around 90% of UK tariff lines – the precise share varies by product and staging.
Fiscal and tariff-saving estimates. The UK’s official impact assessment quantifies immediate and medium-term tariff savings: it estimates import duty reductions on UK exports to India of about £400 million immediately on entry into force, rising to £900 million after ten years when staging is complete. For the UK overall, the deal is projected to increase long-run GDP by 0.13% (≈ £4.8 billion per year); for India the long-run GDP uplift is estimated at 0.06% (≈ $5.1 billion per year). These macro estimates reflect general-equilibrium modelling that assumes full implementation of tariff, services and non-tariff commitments.
Sectoral specifics and politically sensitive lines. The agreement contains detailed, product-level treatments. India’s average tariff on UK products is reported to fall from ~15% to ~3% (average) over the course of implementation; certain high-tariff goods see very large cuts but with phase-ins. For example, spirits (notably Scotch whisky) face staged cuts – Indian duties that were as high as ~150% are reduced in phases (reported to fall to around 75% on entry, and further to ~40% over time in some schedules). Automobiles are treated with quotas and phased tariff reductions: tariffs for many cars will be cut to 10%, but under a quota system that limits volumes (the Financial Times and government documents detail multi-year quota ceilings and phased eligibility by vehicle type, with electric/hybrid quotas increasing over time).
Services, mobility and investment: quantified commitments. The services and investment chapters expand commitments in measurable ways: official texts and briefings increase the number of protected/covered services sub-sectors and include mutual recognition mechanisms for certain professional qualifications. Mobility measures expand the categories under the UK’s Global Business Mobility visa from 15 to 33 categories in practice for intra-company transfers and business visitors; an accompanying fiscal estimate suggested the NI exemption for some intra-company transferees could cost the UK Treasury ~£200 million per year under one analysis (a contested number politically). The deal also contains specific floors for foreign direct investment treatment and investor–state facilitation measures rather than broad investor-state dispute resolution.
Distributional and adjustment magnitudes. The headline GDP numbers mask heterogeneous impacts. The UK impact assessment warns of short-run redistribution: sectors exposed to Indian competition (textiles, some consumer goods) may face adjustment while UK consumers and export sectors gain. The modelling projects a substantial bilateral trade uplift – in the tens of billions of pounds over the long run – but does not claim uniform gains across sub-regions or industries. Implementation costs (customs systems, rules-of-origin verification, quota administration) are non-trivial and will require additional administrative capacity on both sides.
Conclusion (quantitative frame). The FTA’s numerical profile is: signed 24 July 2025; immediate tariff savings on UK exports ~£400m rising to ~£900m after ten years; projected long-run GDP uplift UK: 0.13% (~£4.8bn/year), India: 0.06% (~$5.1bn/year); 64% of UK lines tariff-free on entry (covering £1.9bn of UK exports), and tariff elimination on ~99% of Indian tariff lines per UK/industry summaries. These are the central quantitative takeaways, but sectoral quotas, staging timetables and services commitments mean outcomes will vary materially by industry and over time.
– By Vansheeka Sarin
