The India-UK Free Trade Agreement (FTA), also referred to as the Comprehensive Economic and Trade Agreement (CETA), is a bilateral concept and formal international agreement designed to reduce trade barriers and deepen economic ties between the two nations. Negotiations for the agreement were launched in January 2022 and concluded in May 2025 after 14 rounds of talks, with the agreement formally signed on July 24, 2025. The FTA entered into force on July 15, 2026, aiming to solve the problem of high tariffs and non-tariff barriers that previously restricted bilateral trade.
The core mechanism of the agreement is the progressive elimination or reduction of tariffs on goods. The UK will provide immediate duty-free access for 99% of Indian exports, covering nearly 100% of the trade value. In return, India will reduce or eliminate tariffs on over 80% of UK tariff lines over a 10-year schedule. Key provisions include India immediately reducing the customs duty on Scotch Whisky from 150% to 75%, with a further reduction to 40% over 10 years. For fully imported British cars, the customs duty will immediately fall from 110% to 30% under a quota system, with a phased reduction to 10% over 15 years.
The FTA is closely connected to the Double Contribution Convention (DCC), a social security agreement that also came into effect on July 15, 2026. This convention, which replaced the previous arrangement, extends the exemption period for professionals from paying social security contributions in both countries from three years to five years. The agreement also includes a chapter on business mobility, which eases temporary entry for service providers and expands sectoral access for professionals like engineers and accountants beyond World Trade Organization (WTO) commitments. The FTA is India's sixth free trade agreement implemented under the Narendra Modi government and is considered the UK's most economically significant bilateral FTA since leaving the European Union.