India-UK Trade Pact Takes Effect, Cutting Tariffs and Boosting Services Access
Key Provisions and Impacts of the India-UK Comprehensive Economic and Trade Agreement
By Manoj Kumar
NEW DELHI, July 15 (Reuters) - India and Britain's comprehensive trade pact took effect on Wednesday, cutting tariffs on thousands of goods and widening access for services firms and professionals in both markets.
Immediate Benefits for Indian Exporters
The India-UK Comprehensive Economic and Trade Agreement gives Indian exporters immediate duty-free access to most British tariff lines, benefiting labour-intensive sectors such as textiles, leather, footwear, marine products, gems and jewellery, and processed foods.
Opportunities for Britain in Indian Markets
Britain gains wider access to one of the world's fastest-growing major economies, with phased tariff cuts and quotas for sectors such as automobiles, and openings in procurement, financial services, education, insurance and professional services.
Trade, Investment, and Innovation
The agreement opens "new avenues for trade, investment and innovation," said Piyush Goyal, India's trade minister, adding it would create opportunities for Indian businesses.
Bilateral Trade Figures and Tariff Reductions
India exported $13.44 billion of goods to Britain and imported $11.68 billion in 2025-26, while bilateral services trade totalled $35.44 billion in 2024, with India running a services surplus of nearly $7.9 billion, Indian trade ministry data showed.
Tariff Elimination Details
Britain will scrap duties immediately on 96.8% of tariff lines, covering 97.7% of trade value. India will remove duties at once on 64.1% of tariff lines and phase out tariffs on another 21%, while excluding sensitive products.
Sector-Specific Gains for India
Indian officials expect gains in sectors where British tariffs had ranged from 4% to 20%. Marine exports, textiles, leather, footwear, gems and jewellery will see duties eliminated, helping Indian suppliers compete more effectively in the British market.
Sector-Specific Gains for Britain
Britain is set to benefit from India's calibrated opening in automobiles and alcoholic beverages. Passenger vehicle imports will be subject to a phased quota system, with 37,000 completely built units allowed annually at preferential tariffs.
Expansion of Services and Professional Access
The services package expands market access across 137 sub-sectors, including IT, business services, telecoms, finance and education, and eases temporary entry for business visitors, transferees, investors, service suppliers and independent professionals.
Double Contribution Convention
A linked Double Contribution Convention will exempt eligible Indian professionals and employers from paying into Britain's National Insurance system for stays of up to five years, benefiting about 75,000 workers and 900 employers.
Government Procurement Opportunities
The pact also gives Indian suppliers access to Britain's government procurement market, estimated at about £90 billion, while India offers reciprocal opportunities worth around $114 billion.
(Additional reporting by Shivangi Acharya; Editing by Alexandra Hudson)
