United Kingdom–India Comprehensive Economic and Trade Agreement
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The Minister for Trade (Chris Bryant)
The comprehensive economic and trade agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Republic of India will enter into force for the United Kingdom today.
This follows both the United Kingdom and India completing the necessary domestic legal and operational procedures to bring the agreement into force. Article 30.6 of the agreement provides for entry into force on a date agreed by the parties. The Government have worked closely with India to ensure an expedited entry into force, enabling businesses and consumers to benefit from the agreement as quickly as possible. This is the fastest that the UK has brought a new FTA from signature to entry into force.
India is currently the United Kingdom’s 11th-largest trading partner and is forecast to become the world's third-largest economy by 2031. As India continues to grow, the agreement positions UK businesses to benefit from new and expanded opportunities in one of the fastest-growing major economies in the world.
The UK-India CETA is a landmark agreement. It is the UK’s most economically significant bilateral trade deal since leaving the EU and will support economic growth across every region and nation across the United Kingdom. It will help put money back into working people’s pockets and delivers on the Government’s plan for change. In the long run, the agreement is expected to increase bilateral trade by £25.5 billion, increase UK GDP by £4.8 billion, and boost wages by £2.2 billion per year. The UK is already seeing anticipatory benefits, with total UK-India trade reaching £47.9 billion last year, an increase of 10% year on year.
From the first day of entry into force, there are significant benefits for the UK. Our exporters will benefit from tariff reductions worth around £400 million per year, rising to approximately £900 million once tariff staging is complete. Average Indian tariffs on UK goods will fall from around 15% to 3%. This includes major cuts for gin and whiskies distillers, with the tariff falling from 150% to 75% at EIF, and down to 40% by year 10; automotive companies, who will benefit from the tariff dropping from up to 110% down to 10% within a quota; and cosmetic companies, with a drop from 22% down to as low as 0%, based on the product line.
The agreement also delivers preferential and unprecedented access to India’s federal Government procurement market, guarantees market access for UK services suppliers, and makes trade quicker, cheaper and easier through improved customs procedures and digital trade provisions, which will particularly help small and medium-sized enterprises to break into the market.
The benefits of the agreement will be felt across all nations and regions of the United Kingdom. Every region is expected to see economic gains, including an estimated £190 million boost for both the west midlands and Scotland, and £210 million for the north-west of England. The agreement also supports the Government’s industrial strategy by backing high-growth sectors across the UK economy.
This agreement represents more than just an improvement in trading terms. At a time when global economic norms are under pressure, this deal demonstrates the United Kingdom’s commitment to open, rules-based trade and to building resilient, long-term partnerships with trusted partners. The UK-India CETA is India’s most ambitious trade agreement to date that they have brought into force, including India’s first ever chapters on anti-corruption, consumer protection, labour rights, the environment, gender and development, and contains the strongest environmental commitments India has agreed to in any trade agreement. It also provides a strong foundation on which the United Kingdom and India can build an even more ambitious trading partnership in the years ahead.
The Government consider this agreement to be a long-term strategic investment in the United Kingdom’s prosperity. To date, we have engaged with more than 9,000 businesses across the United Kingdom and India to help them prepare for entry into force. Going forward, the Government will focus on supporting businesses to make full use of the opportunities provided by the agreement, and on monitoring its implementation closely, including through established agreement governance structures such as the Joint Economic and Trade Committee, to identify and address any issues that may arise. It is now for businesses in India and the UK to exploit the opportunities that the agreement affords.
I would like to thank Members of both Houses for their engagement and scrutiny during the ratification of this agreement.
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