The India-UK Comprehensive Economic and Trade Agreement (CETA) will take effect on July 15, 2026, granting tariff-free access to 99% of India's exports to the United Kingdom. The announcement was made by Prime Minister Narendra Modi and his British counterpart Keir Starmer following discussions on the sidelines of the G7 summit in Evian-Les-Bains, according to the Economic Times.
Tariff Elimination Details
Under the pact, tariffs ranging from 8% to 70% on key Indian export categories will be reduced to zero. The following table summarises the pre-existing tariff rates that are being eliminated:
| Product Category | Previous Tariff Rate |
|---|---|
| Processed food products | Up to 70% |
| Marine products | 21.5% |
| Engineering goods and auto components | 18% |
| Leather and footwear products | 16% |
| Textiles and clothing | 12% |
| Chemicals and pharmaceutical products | 8% |
Commerce and industry minister Piyush Goyal stated: "By securing immediate duty free access on 99% of our tariff lines, we have systematically dismantled long-standing tariff walls. This will effectively level the playing field, allowing our textiles, leather, marine, engineering, and processed food sectors to compete with no disadvantage and supply their world class products."
Social Security Agreement
Simultaneously, a social security agreement – the Double Contribution Convention (DCC) – will also come into effect. This ensures that temporary workers do not have to pay social security contributions in both countries, thus reducing costs for Indian professionals posted to the UK.
Impact on Trade and Professionals
According to the Indian commerce and industry ministry, more than 75,000 Indian professionals and over 900 companies are expected to benefit from the agreement. Data from the ministry shows that India's exports to Britain declined 7.6% in FY26 to $13.44 billion from FY25, while imports from the UK rose 36.1% to $11.7 billion. The tariff reductions are expected to reverse that export decline.
Steel Safeguard and Carbon Measures
The implementation of the deal had been delayed due to outstanding issues, including Britain's steel safeguard measures that would have limited tariff-free steel imports from July 1, 2026, and the UK's carbon border adjustment mechanism set for 2027. India said the two sides have "successfully reached a landmark consensus to safeguard and promote bilateral steel trade." The Indian commerce ministry stated that "85% of India's exports are out of the steel measures" and that "India's interest has been protected through a mix of CSQ (country specific quota), residual quota and access under Authorised Use Scheme (AUS)."
Official Statements
Prime Minister Narendra Modi called the deal "a historic milestone for India-UK relations" in a social media post. He said: "This agreement will significantly boost our bilateral trade and investment. It will also unlock numerous opportunities for Indian farmers, workers, MSMEs, startups and innovators and contribute meaningfully to the realisation of Viksit Bharat 2047." The Indian government termed the development a "major stride for India's global economic engagement."
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