UK Prime Minister Keir Starmer is in India today and tomorrow, heading the country’s largest trade mission to deepen ties and push forward the India–UK Comprehensive Economic and Trade Agreement (CETA). The visit marks a key step in shaping the next phase of economic collaboration between the two countries.

Rubix Data Sciences recently analysed this development in its latest report, India-UK CETA: Strengthening Bilateral Trade and Investment, highlighting how the agreement will reshape trade flows and create opportunities across multiple sectors.

India and the United Kingdom signed the Comprehensive Economic and Trade Agreement (CETA), in July 2025, a bilateral free trade agreement that marks a major step in strengthening bilateral economic ties.

Under the deal, India will reduce tariffs on 90% of UK product lines, with average duties dropping from 15% to 3% over time. In return, the UK will eliminate tariffs on 99% of Indian exports. This mutual tariff liberalisation is expected to significantly boost trade flows and investment between the two countries.

The India–UK bilateral trade has already reached USD 56 billion (USD 23 billion of merchandise trade and USD 33 billion of services trade), with a target to double this by 2030 . 

• Key Insights 

For merchandise trade during the period from FY2018 to FY2025: 

Bilateral trade (imports plus exports) between India and the UK increased at a steady 7% CAGR, reflecting stable economic engagement. India has a trade surplus (exports minus imports) with the UK, which has grown at 3% CAGR. India’s imports from the UK have grown at a faster rate of 9% CAGR compared to the 6% CAGR for exports.

The UK ranks as India’s fourth-largest merchandise export destination, accounting for 3.3% of India’s overall exports (in FY2018 and FY2025), a share that is expected to increase in the coming years due to the recently concluded trade agreement. The UK, with just a 1% share of India’s total merchandise imports, was ranked 21 (in FY2025) among India’s merchandise import partners but hopes to increase its share in the coming years.

• Indian Labour-Intensive Industries, agriculture, and processed foods to reap major gains from the India–UK trade deal 

India exports nearly 925 products to the UK . From India's perspective, the agreement offers unprecedented market access to one of the world's most sophisticated economies. With 99% of Indian exports gaining duty-free access to the UK market, sectors like textiles, leather goods, marine products, gems and jewellery, and engineering goods stand to gain immensely. These are often labour-intensive sectors, and the elimination of taris will not only boost export volumes but also create significant employment opportunities across India.

This is a powerful enabler of the 'Make in India' initiative, allowing Indian manufacturers to compete more effectively on a global stage and integrate deeper into international supply chains. Agriculture accounts for 1,437 tariff lines, i.e. nearly 15% of all product lines, highlighting its central role in trade . India exports agricultural and processed food products to nearly 150 countries, with the UK among its top 15 export destinations in FY2025 .

However, the UK accounts for only 2% of India’s agri and processed food export share. The trade agreement enhances access to this high-value market, particularly for niche Indian products such as tea, spices, mangoes, and grapes, unlocking substantial potential for export growth and increased farmer income.

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• Immediate Tariff cuts on Selected Goods Signal the UK's Focus on High-Impact Sectors 

The UK is securing significant access to India’s rapidly expanding consumer market of 1.4 billion people, driven by a growing middle class and rising disposable incomes. Average tariffs on the UK’s exports will fall sharply from 15% to 3%, enhancing competitiveness for key sectors, including gin and whisky, aerospace, medical devices, cosmetics, luxury cars, and premium food products .

Notably, whisky, which is among the top five exported products to India, will see duties cut from 150% to 75% immediately, and further reduced to 40% by 2035, giving the UK a strong first-mover advantage. While other product categories currently have a low market share, the agreement signals the UK’s intent to establish a long-term strategic presence in high-growth segments rather than focusing solely on short-term trade volumes.