India-UK Free Trade Agreement (CETA) Set to Take Effect from July 2026

India and the United Kingdom are preparing to bring their Comprehensive Economic and Trade Agreement (CETA), widely referred to as the India-UK Free Trade Agreement, into force from July 15, 2026. The deal followed nearly three years of detailed negotiations and is one of the most wide-ranging trade agreements India has ever signed. A Free Trade Agreement (FTA) is a treaty between two or more countries that lowers or removes import duties (tariffs) and other trade barriers, making it cheaper and easier for goods and services to move across borders.

The agreement is expected to deliver large economic gains for both sides. Estimates suggest it could add about £5.1 billion to India's economy and £4.8 billion to the UK's economy, while lifting yearly two-way trade by roughly £25.5 billion in the long run. Bilateral trade between the two countries was already worth around £48 billion a year in 2025. India remains the fastest-growing major economy in the G-20 and is projected to become the world's third-largest economy within the next five years.

On the tariff side, the UK will make 99% of its tariff lines duty-free for Indian goods, while India will remove or cut tariffs on about 90% of its tariff lines for UK products. For India, this is expected to support jobs in labour-intensive sectors such as textiles, leather, and jewellery, and to boost service exports in areas like information technology and finance. For the UK, sectors such as aerospace, automobiles, medical devices, and whisky are set to benefit.

The agreement spans 30 chapters and goes beyond tariffs to cover customs procedures, digital trade, and services, which helps small and medium-sized businesses face less paperwork and reach markets faster. It also includes India's first-ever standalone chapters on anti-corruption, gender, and development, along with strong labour and environmental commitments. At the same time, the deal protects sensitive domestic sectors: India keeps safeguards for dairy products and edible oils, while the UK protects items such as sugar, milled rice, pork, chicken, and eggs.

Officials and trade bodies have described the agreement as a balanced template for modern trade deals, combining measurable economic benefits, deeper market access, practical trade facilitation, and protection for vulnerable domestic producers. As the start date approaches, businesses on both sides are being encouraged to review the new rules of origin and prepare to make the most of the lower barriers.