India-UK trade deal comes into force with tariff cuts and wider services access
India and Britain have started implementing a trade pact that lowers tariffs on thousands of goods and expands access in services and procurement. The deal also includes a social security arrangement for eligible Indian professionals working in the UK.
NEW DELHI: India and the United Kingdom began implementing their trade agreement on Wednesday, bringing lower import duties across a wide range of products and opening more areas of the two economies to businesses and professionals.
The India-UK Comprehensive Economic and Trade Agreement gives Indian exporters duty-free entry on most British tariff lines, a move expected to help shipments from sectors including textiles, leather, footwear, marine products, gems and jewellery, and processed foods. For Britain, the accord creates a larger opening into one of the world’s fastest-growing major economies through staged tariff reductions and quotas in areas such as automobiles and silver, along with access in procurement, financial services, education, insurance and professional services.
Indian Prime Minister Narendra Modi said in a post on X that the agreement, together with a related social security arrangement, would strengthen economic relations between the two countries and provide
fresh momentum
Trade flows and tariff changes
According to data from India’s trade ministry, India exported goods worth $13.44 billion to Britain and imported $11.68 billion during the 2025-26 fiscal year. Bilateral trade in services stood at $35.44 billion in 2024, with India recording a services surplus of nearly $7.9 billion.
Britain is immediately scrapping duties on 96.8 per cent of tariff lines, covering 97.7pc of trade by value. India, for its part, is removing tariffs straight away on 64.1pc of tariff lines and will phase out duties on another 21pc over time, while keeping sensitive items outside the arrangement.
Indian officials expect exporters to gain in product categories where British duties previously ranged from 4pc to 20pc. Tariffs are being removed on marine products, textiles, leather goods, footwear, gems and jewellery, which officials say should improve the price competitiveness of Indian goods in the British market.
Engineering, vehicles and services
Engineering goods are also expected to benefit from the agreement. Britain ranks among India’s five biggest destinations for engineering exports. Shipments in that category reached $4.7 billion in 2025-26, while exports rose 34.4pc year-on-year to $972.5 million in the first two months of 2026-27, according to the Engineering Export Promotion Council of India.
EEPC Chairman Pankaj Chadha said the trade deal would widen market access for products such as electrical machinery, auto components and steel, and could help engineering exports to Britain cross $7.5 billion by 2029-30.
On the British side, India is set to gradually open its markets for automobiles and alcoholic beverages. Imports of passenger vehicles will operate under a phased quota framework that allows 37,000 fully built vehicles each year at preferential tariff rates.
The services component of the pact broadens access in 137 sub-sectors, including information technology, business services, telecommunications, finance and education. It also relaxes temporary entry rules for business visitors, intra-corporate transferees, investors, service suppliers and independent professionals.
A linked Double Contribution Convention will exempt eligible Indian professionals and their employers from contributions to Britain’s National Insurance system for assignments of up to five years. The arrangement is expected to benefit around 75,000 workers and 900 employers.
The agreement also gives Indian suppliers access to Britain’s government procurement market, valued at about ₤90 billion, or $121 billion. India is offering reciprocal procurement opportunities estimated at around $114 billion.
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