New Delhi | After resolving a steel issue, India and the UK on Wednesday announced that the free trade agreement will come into force on July 15, a move which is expected to help double two-way commerce to USD 100 billion by 2030.
The two countries will also implement the Agreement on Social Security or the Double Contribution Convention (DCC) on the same day.
Under this, Indian companies operating in the UK would not have to make social security contributions for up to five years for employees they move from India to support their operations.
"The period of exemption under DCC has been increased from 3 years to 5 years, thereby marking a major gain for India’s temporary workers," the commerce ministry said in a statement.
It said that following the successful completion of internal procedures and ratifications by both governments, the agreements will formally enter into force on July 15, 2026.
"The groundwork for this historic agreement was laid in May 2021 through the Enhanced Trade Partnership and the adoption of the India-UK Roadmap 2030, which set the goal of elevating bilateral ties to a Comprehensive Strategic Partnership and doubling trade to USD 100 billion by 2030," it said.
Prime Minister Narendra Modi said that this agreement will significantly boost our bilateral trade and investment.
"It will also unlock numerous opportunities for Indian farmers, workers, MSMEs, startups and innovators and contribute meaningfully to the realisation of Viksit Bharat 2047," he said in a social media post.
Following fourteen intensive rounds of talks and discussions, negotiations for the CETA were concluded on May 6, 2025. The agreement was officially signed on July 24 last year in London.
Commerce and industry Minister Piyush Goyal said that the simultaneous enforcement of the CETA and the DCC on July 15 will open up significant new opportunities for India’s exports. The trade pact will see 99 per cent of Indian exports enter the UK duty-free, while reducing tariffs on British products such as cars and whisky.
"By securing immediate duty-free access on 99 per cent 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," Goyal said.
He added that stringent exclusion lists are actively deployed to insulate our sensitive agricultural and rural economies from import volatility.
"Simultaneously, by exempting our professionals from double insurance contributions, we are protecting the financial interests of our talent pool. This dual breakthrough aggressively expands our global commercial footprint while fiercely guarding domestic sensitivities," Goyal said.
The minister is expected to visit London later this month (June 25-27).
TRADE AND INVESTMENT
Two-way commerce between India and the UK grew 8.62 per cent to USD 25.12 billion (exports: USD 13.44 billion; imports: USD 11.68 billion) in 2025-26, up from USD 23.13 billion in 2024-25. India reported a trade surplus of USD 1.76 billion in the last fiscal. The UK is the sixth largest investor in India.
Britain’s foreign direct investment in India has increased to USD 1 billion in 2025-26, up from USD 795 million.
Between April 2000 and March 2026, India received about USD 37 billion in FDI from the UK, accounting for about 5 per cent of its total FDI inflows.
STEEL SECTOR
After signing the deal, Britain’s steel safeguard measure became a sticking point in implementing the agreement. The ministry said that the two countries have successfully reached a landmark consensus to safeguard and promote bilateral steel trade.
“Following constructive deliberations regarding the UK’s upcoming steel measures effective July 1, 2026, both sides mutually agreed to protect commercial interests, minimise market disruptions, and ensure an overall balanced and stable trading environment for exporters,” it said.
GAINS FOR INDIA IN GOODS
Under the pact, Indian exporters will benefit from the complete elimination of UK tariffs across several key sectors.
Tariffs of up to 70 per cent on processed food products, up to 21.5 per cent on marine products, up to 18 per cent on engineering goods and auto components, up to 16 per cent on leather and footwear products, up to 12 per cent on textiles and clothing, and up to 8 per cent on chemicals and pharmaceutical products will be reduced to zero.
The immediate duty-free access secured under CETA is expected to significantly enhance the competitiveness of Indian exports in the UK market, generate new opportunities for farmers, fishermen, workers, MSMEs and manufacturers, and strengthen India’s integration into global value chains.
SERVICES SECTOR
The UK has provided one of its most comprehensive services commitments ever, covering all major services sectors and 137 sub-sectors of export interest to India.
Indian service providers in IT and IT-enabled services, financial services, professional services, healthcare, education, engineering, telecommunications and consultancy services will benefit from enhanced market access and greater regulatory certainty.
New Delhi | Industry bodies representing alcoholic beverage makers on Wednesday welcomed the implementation of the India-UK Free Trade Agreement (FTA), saying it would boost bilateral trade, support premiumisation of the domestic market and strengthen the spirits value chain, even as domestic manufacturers sought withdrawal of concessions enjoyed by imported liquor brands in some states.
The Confederation of Indian Alcoholic Beverage Companies (CIABC) said the landmark pact would further strengthen economic ties between India and the UK across sectors and lead to higher bilateral trade and investment.
However, CIABC, which represents IMFL players, urged state governments to withdraw concessions such as lower brand registration fees and reduced excise duties extended to bottled-in-origin (BIO) brands, arguing that such incentives have made imported alcoholic beverages cheaper than products manufactured in India.
"With import duties being cut drastically, it is high time that state governments end all concessions currently extended to BIO brands. This has created a situation where importing alcobev products is becoming cheaper than producing them in India," said CIABC Director General Anant S Iyer Meanwhile, the International Spirits and Wines Association of India (ISWAI), which represents leading premium alcoholic beverage companies (mostly MNCs), said the pact will strengthen bilateral trade, support industry growth and create new opportunities for the country's alcoholic beverages sector.
ISWAI said the reduction in tariffs on Scotch whisky imports from the UK, including bulk Scotch used for bottling and blending in India, is expected to generate value across the spirits value chain while widening consumer choice.
"The coming into force of the agreement and the resulting tariff reductions offer significant strategic benefits for both countries," ISWAI CEO Sanjit Padhi said.
According to Padhi, the agreement will enable India's increasingly aspirational consumers to access premium international brands at more affordable prices, while also supporting growth in related sectors such as tourism, hospitality and retail.
The commerce ministry on Wednesday said the India-UK FTA will come into force on July 15 this year. The Comprehensive Economic and Trade Agreement (CETA) was inked on July 24 last year.
As per the FTA signed in London between the two governments, India is reducing duty on UK whisky and gin from 150 per cent to 75 per cent and further to 40 per cent in the tenth year of the deal.
According to ISWAI, India sells over 400 million cases of Indian alcoholic spirits annually, while imported spirits account for only about 2.5 per cent of the total market. Whisky dominates the imported spirits category, with Scotch accounting for around 81 per cent of overall imports of 9.9 million cases.
The association noted that nearly 79 per cent of Scotch imported into India is in bulk form and is used by Indian Made Foreign Liquor (IMFL) manufacturers for bottling and blending operations.
It said tariff rationalisation would help relevant IMFL manufacturers improve the quality of their India-made products, enhance global competitiveness and support exports.
The FTA, ISWAI added, reflects the commitment of both India and the UK to deepen economic ties while ensuring a calibrated approach that balances market access with the interests of domestic industry.
Abneesh Roy from Nuvama Institutional Equities said "It has been long-awaited and hence a positive, which will lead to improvement of margins and volumes." It will have twin benefits RM cost of scotch gets cheaper, and the end product, if imported, can also be made more affordable, driving volume scale-up.