India–UK Trade Pact Comes Into Force: Gold Exports Lead as Tariffs Fall and Bilateral Trade Enters New Era
The India–United Kingdom Comprehensive Economic and Trade Agreement (CETA) has officially come into force, marking one of the most significant milestones in bilateral economic relations between the two countries. The agreement immediately opens duty-free access for almost all Indian exports to the UK while reducing tariffs on a wide range of British goods entering India, ushering in a new phase of trade, investment and services cooperation.
One of the first visible outcomes of the agreement came from India’s gems and jewellery sector. The first duty-free jewellery export consignment—primarily gold jewellery—was ceremonially flagged off under the new trade regime, symbolising the operational launch of the agreement. Similar export consignments worth more than USD 140 million were dispatched from over 20 ports, airports and industrial hubs across India on the first day of implementation.
Under the agreement, the United Kingdom has eliminated tariffs on 96.8% of tariff lines, covering 97.7% of the value of Indian exports, with nearly 99% of Indian merchandise exports now enjoying zero-duty market access. Major beneficiaries include textiles, garments, leather products, footwear, engineering goods, pharmaceuticals, marine products, processed foods, gems and jewellery, chemicals and auto components. The move is expected to significantly improve the competitiveness of Indian manufacturers in the British market.
For British exporters, India has removed import duties on 64.1% of tariff lines immediately, while tariffs on many other products will be reduced in phases over the coming years. Luxury automobiles are among the first products expected to become more affordable in India, with several manufacturers already announcing price reductions after the agreement took effect. However, consumers waiting for substantially cheaper Scotch whisky and gin may have to wait longer, as tariff reductions on alcoholic beverages are being implemented gradually under the agreement’s phased schedule.
Beyond merchandise trade, the CETA contains wide-ranging provisions covering services, investment and professional mobility. Indian IT professionals, consultants, engineers, architects and other skilled workers are expected to benefit from easier market access and social security arrangements. A new Double Contribution Convention allows eligible professionals temporarily working in the other country to avoid paying social security contributions in both jurisdictions simultaneously, reducing employment costs for businesses and workers.
Industry leaders have welcomed the agreement as a transformational opportunity for Indian exporters. The pharmaceutical industry expects exports to the UK to rise by as much as 10% during FY2027, while engineering, textile and leather sectors are also forecasting significant growth as tariff barriers disappear. Small and medium enterprises are expected to gain from improved market access, provided they comply with the agreement’s rules of origin and certification requirements.
The agreement is also expected to reshape consumer markets in both countries. In the United Kingdom, Indian clothing, footwear, jewellery, processed foods and other manufactured products are likely to become more competitively priced due to the elimination of customs duties. In India, selected British products—including premium automobiles, medical devices and industrial machinery—are expected to become progressively cheaper as tariff reductions take effect over the coming years.
Government officials in both countries have described the agreement as a landmark strategic partnership rather than a conventional trade pact. Beyond tariff reductions, the CETA establishes new frameworks for regulatory cooperation, government procurement, digital trade, investment protection and intellectual property, creating a comprehensive architecture for long-term economic engagement between India and the United Kingdom.
With the agreement now operational, attention will shift to how quickly businesses adapt to the new trading framework. Exporters are expected to accelerate shipments under the preferential tariff regime, while manufacturers and investors in both countries prepare to take advantage of expanded market access, making the India–UK CETA one of the most consequential bilateral trade agreements in India’s recent economic history.
