With the Comprehensive Economic and Trade Agreement (CETA) between India and the UK coming into force on Tuesday, India has secured significant gains across sectors, including preferential steel quotas, social security exemptions for Indian professionals, and wide-ranging tariff concessions for exporters.
A key breakthrough under the agreement is a special concession on steel quotas. India has secured a quota worth approximately $350 million—well above its historical average steel exports of around $200 million to the UK—along with access to residual quotas, according to the Commerce Ministry.
"Around 100 tariff lines covered under the UK steel quotas were worth about $200 million in exports. The quota we have received is higher at around $350 million, and we have also been granted access to a residual quota," an official said.
With enhanced allocations across nearly 100 critical tariff lines, India's steel exports to the UK are projected to touch $1 billion by FY27.
The free trade agreement has also brought substantial financial relief for Indian professionals and employers through the newly enacted Double Contribution Convention (DCC), which eliminates the requirement for Indian workers temporarily posted to the UK to make dual social security contributions for up to five years.
The Commerce Ministry estimates that the provision will benefit more than 75,000 Indian workers and around 900 employers, translating into annual savings of over $600 million for industry and significantly improving the competitiveness of Indian firms operating in the UK.
Under the DCC, Indian professionals on temporary assignments in the UK will continue contributing to India's social security system and will be exempt from paying the UK's National Insurance contributions during the five-year period.
The UK has also offered tariff liberalisation on 98.8% of its tariff lines, making 97.7% of India's trade value immediately duty-free. According to the Commerce Ministry, Indian exporters are expected to start benefiting from the agreement from day one.
For key manufacturing sectors, tariffs have been reduced to zero. UK duties of up to 12% on textiles and clothing, 16% on leather and footwear, 18% on auto components, and 14% on electrical machinery have been eliminated. The marine sector has secured 100% duty-free access, removing tariffs of up to 20% on products such as frozen shrimp, fish and squid.
The Commerce Ministry noted that India had previously been at a competitive disadvantage vis-à-vis countries such as Bangladesh and Vietnam in sectors like textiles and marine products, where these countries enjoyed preferential or zero-duty access to the UK market. The FTA is expected to help Indian exporters regain competitiveness and expand their market share in the UK.
In the agriculture and processed food segment, India has secured zero-duty access for 97.3% of processed food tariff lines, providing opportunities for products such as fruits, honey and bakery items to compete more effectively with European suppliers in the UK market.
At the same time, New Delhi has protected sensitive domestic sectors by excluding dairy products, edible oils and key grains from tariff commitments. The UK, for its part, has granted zero-duty access from the date of implementation for all agricultural products except chicken, pork, eggs, rice and sugar.
The UK has got the quota to export up to 37,000 passenger vehicles including both EVs and ICE annually at preferential tariffs. However, mass-market electric vehicles (EVs) priced under £40,000, hybrids, and affordable internal combustion engines receive no tariff concessions for the first five years, delaying EV concessions until the sixth year.
While the FTA comes into effect from July 15, discussions regarding CBAM are still ongoing. "CBAM is a regulation which is under work. It has yet not come to fruition. Both sides are engaged in discussing CBAM regulation," said Commerce Secretary Rajesh Agarwal.
