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).
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.
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.
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.
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.