India–UK Trade Pact Opens 99% Duty-Free Market For Indian Exports, Eases Visa Rules For Professionals

Nearly 99% of India’s export tariff lines will now enter the UK market without customs duties as India and the United Kingdom have now signed a Comprehensive Economic and Trade Agreement (CETA) that promises to double bilateral trade by 2030 and boost jobs across sectors that employ millions of Indian workers.

At the core of this agreement is a near total duty-free access for Indian exporters. This covers labour-intensive sectors such as textiles, garments, leather, footwear, gems and jewellery, marine products, engineering goods, chemicals, and processed food. For India, which exported around $25 billion in goods to the UK last year, this is expected to unlock a significant share of the UK’s massive consumer market, especially in segments where India faces stiff competition from countries like Bangladesh and Vietnam.

The pact, finalised after over two years of negotiations and 14 rounds of talks, was signed in the presence of Prime Ministers Narendra Modi and Keir Starmer by India’s Commerce Minister Piyush Goyal and the UK’s Business & Trade Secretary Jonathan Reynolds.

The textile and apparel sector is set to benefit immediately. Indian garments that currently attract duties of up to 12% in the UK will now enter duty-free, giving Indian manufacturers a level playing field. This is expected to boost exports from key clusters such as Tirupur, Ludhiana and Surat. Leather and footwear exports, which face duties as high as 16%, will also see a big jump. Currently, India exports about $440 million of leather goods and footwear to the UK. Officials expect this to double within a few years, with states like Tamil Nadu, Uttar Pradesh and West Bengal standing to gain the most.

Marine exports, including shrimp and fish, are another area of focus. India’s seafood exports to the UK have been relatively small — about $180 million — compared to India’s total seafood exports of over $8 billion. Removal of duties is expected to help coastal states like Gujarat, Kerala, Andhra Pradesh and Odisha expand their exports and benefit fishing communities directly.

In addition, the deal covers engineering goods, which form India’s largest export segment globally. India exports about $4.3 billion worth of engineering goods to the UK, while the UK’s total imports in this segment exceed $190 billion. With tariffs dropping to zero, India hopes to double its engineering exports to the UK within five years.

The chemicals and plastics sectors will also see tariffs scrapped, benefiting exporters of dyes, organic chemicals and plastic products. Processed food, fruits, vegetables, spices, tea and coffee will all enter the UK at zero duty, opening a bigger share of the UK’s retail and ethnic food markets.

India Opens It Market

While India has opened its market for about 90% of UK tariff lines, officials stress that sensitive sectors like dairy, wheat, rice, apples, pulses, edible oils and gold are protected. Tariff cuts for items such as automobiles and premium alcoholic beverages will be phased in gradually over five to 10 years to protect domestic industries. Safeguard clauses have been built in to allow India to impose protective duties if cheap imports flood the market unexpectedly.

The agreement also brings significant gains for India’s services sector and professionals. India already exports around $20 billion in services to the UK, with information technology, finance, education, health and professional services forming the bulk.

The new deal creates a clear framework for easier temporary movement of Indian professionals to the UK. Business visitors, intra-company transferees, contractual service suppliers, independent professionals and selected cultural professionals — such as chefs, yoga teachers and classical musicians — will get smoother visa processing and specific annual quotas.

A key highlight is the double contribution exemption: Indian companies and professionals on short assignments in the UK will not have to pay National Insurance contributions twice for up to three years. This alone is expected to save Indian companies and workers over Rs 4,000 crore each year.

The government expects the new trade deal to lift India’s total exports to the UK to over $40 billion by 2030. Overall, the target for bilateral trade is set at $100 billion by the end of this decade, up from the current $56 billion in goods and services combined.

States with large MSME clusters, artisan hubs, industrial zones and export-oriented units — such as Gujarat, Maharashtra, Tamil Nadu, Karnataka, West Bengal and Uttar Pradesh — are expected to see the largest gains in orders and employment. Both countries will now start their respective ratification processes to bring the agreement into force by early next year.