India-UK Free Trade Agreement to Take Effect on July 15; Zero-Duty Access for 99% of Indian Exports

India and the United Kingdom have announced that their landmark Free Trade Agreement (FTA) will come into force on July 15, 2026, following discussions between Prime Minister Narendra Modi and British Prime Minister Keir Starmer on the sidelines of the G7 Summit in France. 

The announcement marks the operationalisation of the Comprehensive Economic and Trade Agreement (CETA), which was signed on July 24, 2025, and is expected to facilitate bilateral trade and investment between the 2 countries. 

Tariff Reductions Across Goods Trade 

The agreement provides zero-duty access to around 99% of India's exports to the UK, covering nearly the entire value of bilateral merchandise trade. 

Tariffs on Indian exports including electronics, textiles, chemicals, pharmaceuticals, toys, gems and jewellery will be eliminated under the agreement. 

In labour-intensive sectors, duties on marine products, textiles and apparel, chemicals and base metals will be reduced to zero. Tariffs on processed food products, engineering goods, auto components, leather and footwear products will also be eliminated, while Britain has removed tariffs on Indian tea, instant coffee and spices. 

The agreement is also expected to support exports of smartphones, optical fibre cables, inverters, fresh grapes, bakery products, nuts, and sauces. 

India to Reduce Tariffs on Select UK Products 

India will reduce tariffs across several product categories under the agreement. 

Tariffs on whisky will decline from 150% to 75% immediately and will be further reduced to 40% over the next 10 years. Automobile tariffs will gradually fall to 10% under a quota system from the current 110%. 

India will also lower or eliminate duties on aerospace products, electrical machinery and selected medical devices over a phased period. 

At the same time, India has kept sensitive sectors such as dairy products, cereals, millets, edible oils, oilseeds, apples and several vegetable products outside its market-access commitments. 

India-UK FTA: Services, Mobility and Bilateral Trade Benefits 

The UK has offered one of its most comprehensive services packages to India, covering 137 sub-sectors including IT and IT-enabled services, financial services, healthcare, education, engineering and consultancy services. 

The agreement also creates annual mobility opportunities for 1,800 Indian chefs, yoga instructors and classical musicians seeking employment in the UK. 

Alongside the FTA, the UK-India Double Contributions Convention Agreement will allow eligible professionals moving between the 2 countries to continue contributing to their home social security systems for up to 60 months under specified conditions. 

The UK government estimates that the agreement will increase bilateral trade by £25.5 billion annually in the long term, while India expects total bilateral trade to double from the current level of around $56 billion by 2030. 

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Steel Safeguard Concerns Addressed Ahead of Implementation 

The treatment of Indian steel exports under the UK's safeguard regime had emerged as one of the key issues delaying implementation of the agreement. 

The Indian government clarified that 85% of India's steel exports will remain outside the scope of Britain's safeguard measures scheduled to take effect from July 1, 2026. According to the government, India's interests have been protected through country-specific quotas, residual quota allocations and access under the Authorised Use Scheme. 

Conclusion 

The India-UK Free Trade Agreement will come into force on July 15, 2026, introducing tariff reductions, expanded market access and services commitments across multiple sectors. The agreement also includes provisions related to mobility, social security contributions and bilateral trade facilitation between India and the United Kingdom. 

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