The India-UK Comprehensive Economic and Trade Agreement (CETA), set to come into force on July 15, is expected to remove a significant tariff disadvantage for Indian exporters by providing duty-free access to nearly 99% of India’s exports to the United Kingdom. However, the Global Trade Research Initiative (GTRI) has cautioned that tariff elimination alone will not guarantee higher exports unless India strengthens product standards, certification, logistics, regulatory compliance and commercial linkages with British buyers.
According to GTRI, the agreement removes a major barrier to trade, but exporters will need to meet stringent UK quality, safety and traceability requirements to fully benefit from the preferential market access.
Currently, only 48.2% of India’s export value enters the UK duty-free under Britain’s most-favoured-nation (MFN) regime. With CETA coming into effect, almost the entire value of India’s existing exports to the UK will receive zero-duty treatment.
GTRI Founder Ajay Srivastava said that while the agreement opens new opportunities, success will depend on strengthening testing infrastructure, certification systems, logistics, regulatory approvals and buyer networks.
The think tank noted that the UK imported goods worth $928.9 billion globally in 2025, but sourced only $15.2 billion from India, giving India a market share of just 1.6%. Conversely, the UK accounted for only 3.4% of India’s global merchandise exports.
GTRI expects the biggest gains in labour-intensive sectors where India has strong manufacturing capabilities but previously faced tariff disadvantages. These sectors include garments, textiles, leather products, footwear, processed foods, seafood, selected agricultural products, automotive components and engineering goods.
India exported garments worth $16.3 billion globally in 2025, of which $1.3 billion went to the UK. The removal of tariffs is expected to improve the competitiveness of Indian apparel, leather and footwear exporters. However, suppliers must continue to comply with UK requirements on product quality, chemical usage, traceability, labour standards and timely delivery.
Processed food has also been identified as a sector with significant export potential. The UK imported processed food worth $33.4 billion in 2025, while imports from India stood at only $354 million, representing a market share of just 1.1%. GTRI said ready-to-eat meals, bakery products, confectionery, sauces and ethnic food products could benefit from lower tariffs, provided exporters comply with Britain’s food safety, labelling and traceability standards. The report also highlighted the importance of expanding cold-chain infrastructure and logistics capabilities.
In the automotive sector, the UK imported vehicles, motorcycles and components worth $92.2 billion in 2025, but sourced only $325 million from India. While tariff elimination is expected to improve competitiveness, Indian manufacturers will still need to meet UK vehicle safety, emissions and certification requirements, along with complying with rules of origin under the agreement.
GTRI also observed that tariff preferences alone may not be sufficient for sectors such as steel, where UK safeguard measures, import quotas, trade remedies and emerging carbon-related regulations could continue to limit export growth despite duty concessions.
The report concludes that the real challenge after CETA’s implementation will be enabling businesses—particularly small and medium-sized enterprises—to utilise the agreement effectively through improved testing facilities, regulatory support, market intelligence and stronger commercial engagement with UK buyers.
