There is a maxim in trade diplomacy that is worth dusting off today: the value of an agreement lies not in its signing, but in its living.
The India–UK Comprehensive Economic and Trade Agreement (CETA), signed in July 2025 after 14 rounds of negotiation— and inevitable bumps in the road—went into force this week.
This is one of the most consequential bilateral trade deals for both sides. It is estimated to give a £25.5 billion annual boost to bilateral trade by 2040. With a framework that gives 99% of Indian exports duty-free access to the UK and offers concessions on 89.5% of British tariff lines to India, the opportunity begins now.
The CETA’s promise: The sectors in which both countries enjoy their strongest export advantages stand to benefit immediately.
Consider food and beverages. UK-prepared foodstuffs alone are projected to see £213 million in annual duty savings at the agreement’s entry into force. This is the single largest tariff saving across any UK export sector. For a small distillery or premium food brand, it means wider margins, market share and the confidence to plan for expansion.
Indian textile exporters, meanwhile, stand to save up to £120,000 per £1 million on their shipments to the UK under zero-duty access, enabling them to compete effectively with Bangladesh and Vietnam, while lowering the price of everyday essentials for British consumers. This sector is one of India’s largest employers and export earners, and the CETA opens a door of significant scale for it.
The ambition of the CETA was always to be more than a simple tariff liberalization exercise. It was designed to foster industrial collaboration, integrate supply chains and build an institutional architecture for an enduring long-term partnership.
Its cumulation provisions, for example, allow materials originating in one country to be treated as originating in the other when incorporated into finished products, encouraging firms to build integrated value chains rather than simply trade finished goods.
What the CETA was built to deliver: To appreciate the scale of what is on offer, we must understand how an agreement like the CETA delivers value in the first place.
Tariff benefits will happen in stages, not overnight. The tariff liberalization architecture is a carefully calibrated schedule in various categories, each specifying when and by how much duties will reduce.
For Indian textile exporters, duty elimination is immediate. For Scotch whisky entering India, tariffs fall from 150% to 75% on day one, then to 40% over ten years, subject to a minimum import price. UK aerospace parts enter India duty-free immediately, while aircraft engines follow a five-year tariff phase-out.
Indian pharmaceuticals receive zero-duty UK access from the start; UK-made cosmetics gained phased access to the Indian market over ten years. All must, of course, comply with standards of the importing country.
A phased approach gives industries time to adjust and manage competitive shocks. But it also delivers something arguably as valuable as tariff elimination itself: predictability.
Even where tariffs are not yet zero, a binding commitment removes uncertainty that may otherwise deter investments. Businesses can model landed costs for year 3, year 5 and year 10 landed. They can restructure supply chains, commit capital and sign long-term contracts. That is the transformative promise of the CETA, and it began from the moment the agreement entered into force.
The importance of momentum: There is a structural element that rewards early action. Phased duty reductions in many categories mean that full benefit realization would lie in the medium to long term. The architecture demands trust across a long timeline. The sooner businesses begin investing in compliance, the sooner they can unlock the benefits: rules of origin preparation and certification, supply chain restructuring, documentation digitization, etc. The window is now open.
The path from a deal’s signing to its taking effect is never smooth. Implementation invariably rakes up discussion points on, say, domestic legislative sequencing, the mechanics of safeguard frameworks in adjacent areas or other sector-specific concerns.
Yet, the manner in which both governments have addressed these issues reflects just the sort of constructive, solutions-oriented diplomacy that makes for success. Both governments worked out complex issues swiftly and in good faith. That augurs well for the road ahead.
Alongside the CETA, the India-UK Double Contribution Convention (DCC) took effect the same day, exempting Indian professionals on temporary UK assignments from dual social security contributions, with the benefit period extended from three to five years. Over 75,000 Indian professionals and 900 companies are set to benefit from this.
With the DCC, India joins a group of countries, including the US, Canada, Japan and South Korea, with which the UK has such bilateral social security arrangements.
The DCC is a fitting companion to the CETA, underscoring the fact that the partnership is as much about people as it is about merchandise trade.
A signal to the world: The CETA sends the message that two major democracies can negotiate a sophisticated, comprehensive trade deal that delivers benefits for both.
Investment decisions, supply chain reconfigurations and market-entry strategies that a functioning CETA catalyses are time-sensitive. Business does not wait. Capital is mobile. The UK–India corridor now offers something very valuable: predictability.
Throughout the negotiations, both sides chose long-term strategic value as their desired outcome. New Delhi opened its public procurement to foreign bidders and accepted source-code protection. London embraced a calibrated, development-first deal for India. That same long-term thinking now marks optimism over the deal’s gains.
From exporters in Surat and distilleries in Speyside to aerospace clusters in Bengaluru and Bristol, businesses that look beyond borders no longer need to wait. The India-UK agreement is now in force. The opportunity has gone live. The task now is to seize it.
The authors are, respectively, director, government relations and membership services; and senior manager, UK India Business Council (UKIBC).