Prime Minister Narendra Modi with British PM Keir Starmer during the G7 Summit in Evian-les-Bains, France, on June 17, 2026. REUTERS/Evelyn Hockstein | Photo Credit: EVELYN HOCKSTEIN

The India-UK free trade agreement will officially enter into force on July 15, opening British markets wider for Indian exports such as textiles, footwear, agri products and gems & jewellery, following a last-mile breakthrough reached on a deadlock over steel import quotas.

The announcement on the deal, officially called the Comprehensive Economic and Trade Agreement (CETA), followed a bilateral meeting between Prime Minister Narendra Modi and UK Prime Minister Keir Starmer at the sidelines of the G7 meeting in Evian, France.

Trade boost

“The deal boosts UK GDP by £4.8 billion and Indian GDP by £5.1 billion and bilateral trade by £25.5 billion every year in the long run,” according to a statement by the British High Commission in New Delhi on Wednesday.

In a boost to Indian IT sector, a parallel social security pact–the Double Contributions Convention Agreement–protecting transient workers from being double-taxed on local social security systems, would also get implemented.

Indian exporters of labour intensive goods such as textiles, leather items, gems & jewellery, footwear and agricultural goods are set to gain greater market access in the UK.

“The simultaneous enforcement of the CETA and the Double Contribution Convention on July 15 2026 will open up significant new opportunities for India’s exports. By securing immediate duty-free access on 99% of our tariff lines, we have systematically dismantled long-standing tariff walls. This will effectively level the playing field, allowing our textiles, leather, marine, engineering, and processed food sectors to compete with no disadvantage and supply their world class products,” the Commerce Department said in a statement.

“For British exporters, Indian import duties on Scotch whisky will plummet from 150 per cent to 40 per cent. Automotive tariffs will drop from 100 per cent to 10 per cent under a specialised quota, and various cosmetic duties topping 22 per cent will be systematically phased out,” the British statement noted, adding that 90 per cent of India’s tariffs were being slashed.

Tensions had spiked in recent weeks after the UK had proposed steel safeguard measures under which tariff free import quotas were to be slashed from July 1 2026 and duties on shipments exceeding the quota were to be near-doubled to 50 per cent. 

The move had alarmed New Delhi, as it put nearly $900 million worth of Indian iron and steel exports at immediate risk. The FTA implementation was thus halted and the two sides were engaged in intense negotiations to sort the matter with a breakthrough reached on Wednesday, sources said.

“We are bringing our landmark trade deal with India into force as quickly as we can,” UK Business and Trade Secretary Peter Kyle said in a statement, noting that the agreement hands British companies an immediate competitive edge over global rivals. Kyle urged industries on both sides to use the 28-day countdown to align their logistics, noting that first-year tariff savings alone are expected to hit £400 million.

Timeline

The UK-India Double Contributions Convention Agreement, which will be implemented on July 15 as well, extends the period that corporate transferees and expatriates can remain on their home country’s pension framework from 36 months to 60 months. “This is reciprocal for both British and Indian professionals and will be applicable to highly skilled professionals on pre-existing visa routes. This is in line with our arrangements with other countries such as Korea, Japan, and Canada,” the statement noted.

The reduction in duties on bulk Scotch imports will also benefit India’s domestic spirits industry by lowering input costs for bottling and blending operations, enabling manufacturers to enhance product quality and competitiveness, pointed out Sanjit Padhi, CEO, International Spirits and Wines Association of India (ISWAI).

Published on June 17, 2026