On 24 July 2025, Indian Prime Minister Narendra Modi and UK Prime Minister Keir Starmer officially signed the Comprehensive Economic and Trade Agreement (CETA) – a historic milestone marking the most significant UK trade deal since Brexit. Negotiated over more than three years, this agreement is equally ambitious and transformative.
Major Trade Gains: Opening Markets and Cutting Tariffs
The deal offers duty‑free access for 99% of Indian exports to the UK, spanning textiles, leather, gems, processed foods, and more. UK exports such as Scotch whisky, gin, autos, cosmetics, aerospace components will also benefit, with duties halved in many cases and phased reductions over time. International trade in services receives greater liberalisation, especially in professional mobility, and includes a Double Contribution Convention to ease social security rules for migrant workers.
Economic Impact: Boosting Growth, Jobs & Investment
This trade deal is forecast to double bilateral trade to about $112 billion by 2030 (from $56 billion in FY2024), with a projected £4.8 billion boost to UK GDP annually and £6 billion in bilateral investment. Key benefits are expected for Indian MSMEs, women-led exporters and UK manufacturers alike.
Winners and Concerns: Who Gains and What Remains Open
Indian textile and apparel exporters, particularly from Tiruppur, Surat and Ludhiana, stand to gain between 30–45% export growth, with UK duties removed entirely. Chemicals and marine products are also poised for expansion. UK whisky producers will benefit from tariff cuts reducing costs by nearly half, while automobiles and cosmetics also enjoy eased access.
However, some sectors remain cautious. Pharmaceuticals, auto components, electronics, and certain MSMEs face compliance burdens under stricter sustainability and technical standards, while carbon border taxes remain a dispute. The deal also does not fully resolve investment protection, and a Bilateral Investment Treaty remains in negotiation.
What It Means Going Forward
The India–UK FTA is more than a tariff‑cutting deal. It establishes deep strategic partnership, covering services, innovation, digital trade, and mobility – and paves the way for joint initiatives under the India–UK Vision 2035. The agreement will require ratification by both countries’ parliaments, but its long‑term potential for jobs, growth and cultural ties is clear.
This landmark deal not only reinforces historical ties between India and the UK – it charts a bold path for an inclusive, innovation-driven future rooted in mutual prosperity.
