India-UK trade deal comes into effect: What’s cheaper in each country now?

India and the United Kingdom have activated their Comprehensive Economic and Trade Agreement (CETA), eliminating tariffs on thousands of products and broadening market access for service providers in both nations. The agreement, which took effect on Wednesday, provides Indian exporters with immediate duty-free access to most British tariff lines, particularly benefiting labour-intensive sectors including textiles, leather goods, gems, jewellery, and engineering products. The UK gains expanded access to Indian markets through phased tariff reductions and quotas in sectors such as automobiles.

India's Commerce and Industry Minister Piyush Goyal characterized the agreement as a defining milestone in bilateral relations. He highlighted opportunities for Indian textiles, leather, gems, jewellery, engineering goods, marine products, chemicals, processed foods, and small-to-medium enterprises. The deal also opens new opportunities for Indian information technology, professional services, financial services, education, and business services sectors, while facilitating greater mobility for Indian professionals.

The British government released a policy paper on Wednesday asserting the agreement represents the best deal any country has negotiated with India. Under the terms, India will remove or reduce tariffs on 90 percent of tariff lines covering 92 percent of existing goods imports from the UK based on 2022 trade data. Simultaneously, the UK will immediately eliminate duties on 96.8 percent of tariff lines covering 97.7 percent of trade value. India will immediately remove duties on 64.1 percent of tariff lines and phase out tariffs on an additional 21 percent while protecting sensitive products.

Trade data from India's Ministry of Commerce and Industry shows India exported $13.44 billion worth of goods to the UK in financial year 2025-26, while imports totalled $11.68 billion. Bilateral services trade reached $35.44 billion in 2024, with India maintaining a services surplus of approximately $7.9 billion. Prime Minister Narendra Modi stated the agreement reflects trust between the two democracies and commitment to building a forward-looking partnership centred on trade, technology, investment, and innovation. He emphasized the deal will deepen cooperation in technology, professional services, and innovation while supporting greater mobility for skilled Indian talent.