The UK-India FTA: what's in it for businesses?

In our earlier article, we took stock of the components of the FTA that were published at the time. With the full legal text now available, businesses have greater clarity on how the agreement will operate in practice, including tariff reduction schedules, rules of origin, mobility provisions and access for trade in services. A number of provisions in the full text of CETA go further than previously anticipated, while others reflect what had already been published beforehand.

What are the key components?

While we had a good sense of the shape of the FTA from the point of ‘agreement in principle’, the final text does include several provisions that did not feature in previous government summaries and early documentation.

Tariffs: The UK and India have agreed one of India’s most ambitious tariff liberalisation schedules to date, particularly given the traditionally high tariffs India imposes on a range of goods. While a number of tariff reductions were already known, the full schedules provide new clarity on timelines, quotas and carve outs for each sector in both the UK and India.

The UK has agreed to eliminate tariffs on 99% of Indian goods while retaining tariffs on certain food products including sugar, pork and chicken. The UK has also agreed to remove tariffs on Indian vehicles, but with a quota for electric/hybrid cars which varies by value, starting at 17,600 vehicles six years after the agreement enters into force.

Indian tariffs on UK goods will be reduced gradually, with different rates of phased reductions applying dependent on the good. Key tariff reductions for UK industries include:

• Consumer: Tariffs on UK origin whisky and gin will fall from 150% to 75% at entry into force then to 40% over ten years, while British lamb will see tariffs go from 33% to zero. The UK automotive sector will benefit from tariff reductions from up to 110% to 10% with varying timelines and quotas dependent on the type of vehicle.
  
  
• Energy, resources and industrials: India will reduce tariffs on renewable energy products including wind turbines and solar modules as the agreement seeks to advance collaboration and investment in renewable energy. In addition, the UK’s chemicals and advanced manufacturing sectors will benefit from a multitude of tariff cuts, ranging from immediate elimination of tariffs to phased reductions over varying timelines up to ten years.
  
  
• Life Sciences and Health Care: Tariffs on UK pharmaceutical exports are largely in scope of tariff reductions within the FTA, with several finished medicines benefitting from immediate tariff eliminations. Medical devices exported to India will benefit from a phased tariff reduction, moving from 7.5% to 0% over a ten-year period.
  
  
• Telecoms, Media and Technology (TMT): India will eliminate tariffs on a variety of UK technology exports including electrical circuits, broadcasting equipment and optical fibre cables. While some products will see immediate tariff reductions, many products in the TMT sector will see reductions phased in over a five to seven-year period.

Rules of Origin (ROO): The UK government previously stated that it has “secured India’s best ever agreement” on ROO and the final text confirms a notably flexible framework. A self-certification model will apply for proof of origin, with imports into the UK valued below £1,000 exempted and higher value consignments being certified through a statement on invoice, or based on their knowledge of the product origin, reducing the need for formal documentation.

Compliance with ROO will be monitored through a verification process, with customs authorities on both sides able to request supporting documentation or conduct targeted checks on imports claiming preferential tariff treatment. In addition, the FTA sets out a framework for the authentication of origin declarations for UK goods exported to India.

The agreement also allows for full bilateral cumulation, enabling UK and Indian materials and processing to be counted together when determining origin. While product-specific origin rules will still require close review, the overall approach provides a streamlined compliance process for traders on both sides.

Mobility: The chapter on mobility confirms and expands on provisions beyond earlier summaries released by the government. While it was known that existing rules would be locked-in, the full agreement provides granular detail on the routes, durations and exemptions.

The UK and India have locked-in current mobility rules for business visitors, intra-corporate transferees and expansion workers. For contractual service suppliers and independent professionals, the FTA expands the number of sectors that are eligible to apply for a visa to travel to the UK to deliver services. While the FTA broadly aligns the sectors that can apply for a visa to provide services in the UK with other UK FTAs, the UK has also agreed to open this route to yoga teachers and classical musicians, capped at 1,800 visitors per year.

As published before the full text of the agreement, the UK and India will negotiate a Double Contribution Convention which enables employees temporarily working abroad to make social security contributions in only one country. The UK and India will aim to agree the Double Contribution Convention to enter into force simultaneously with the FTA.

Customs and trade facilitation: The final agreement sets out detailed commitments on customs cooperation and streamlined border procedures. Both countries have agreed to implement paperless trading environments, including the acceptance of electronic customs declarations. The agreement also includes provisions on advance rulings, allowing traders to obtain binding decisions from customs authorities on classification, valuation and origin before import.

In addition, both sides have committed to faster clearance of perishable goods and an Authorised Economic Operator programme. Many of these measures were expected based on early government releases and the finalisation of these terms will likely benefit sectors with just-in-time supply chains or high-frequency shipments.

Government Procurement: The full text confirms India will allow access for some UK businesses to India’s government procurement market, including for goods, services and construction projects. UK suppliers will be able to bid for central government contracts in India, with specified thresholds published for each contract category. In practice, the thresholds mean that most large central government procurement opportunities will fall within scope.

As published previously, India has committed to ensuring UK businesses with at least 20% of their product or service originating in the UK will be treated as a ‘class two local supplier’, giving them the same status as Indian businesses with similar levels of domestic origin goods or services. Furthermore, if the UK or India agree to broader government procurement terms in a new FTA with another country, both sides have committed to future consultations on expanding coverage of the CETA.

While the level of access to government procurement contracts for UK businesses may not be as comprehensive as in other UK FTAs, CETA reflects meaningful progress in securing access to a traditionally restricted area of India’s economy.

Digital Trade: The UK government stated the FTA contains “India’s best ever commitments on digital trade”. The full text confirms commitments aimed at facilitating the development of digital trading systems including electronic signatures and authentication, paperless trading, as well as protections against unsolicited messages.

The chapter on digital trade confirms protections against the forced transfer of source codes for businesses as well as committing both countries to cooperating on issues related to emerging technologies and associated international standards. However, as anticipated, the agreement does not include provisions guaranteeing the free flow of data across borders.

While the digital provisions under CETA may not be as ambitious as other UK agreements, such as the UK Singapore Digital Economy Agreement, UK businesses operating in India’s growing digital economy will benefit from clarity on the protections afforded by the agreement.

Services: Many of the overall structural elements of the services Chapter were known, such as the equal treatment of imported services with domestic services, subject to qualification requirements, which is commonplace in FTAs. The final agreement outlines the core commitments on trade in services, including not requiring businesses to establish or maintain a local presence in order to provide services. 

However, within their schedules of specific commitments, both the UK and India set out which services and sectors are exempted from commitments to improve market access. Provisions encouraging the mutual recognition of professional qualifications in the future are also included in the final agreement, which could further improve market access for UK service providers in the future. 

While the FTA locks in market access for certain services, UK service exporters will benefit from not only improved clarity but also the commitments under other chapters which facilitate trade in services, such as those for mobility, digital trade and intellectual property.

Intellectual Property: The FTA includes an intellectual property (IP) chapter that reinforces existing commitments under the WTO TRIPS Agreement which covers IP, but also introduces some areas of enhanced cooperation. The chapter focuses on transparency, procedural fairness and cooperation between IP offices in each country. Included within this are commitments to streamline the patent registration process, improve transparency and enforcement for digital infringements of IP rights. A framework for protecting Geographical Indications (GIs) has also been agreed, with an annex containing the binding list of protected GIs yet to be finalised.

Technical barriers to trade: The FTA includes a dedicated chapter covering technical barriers to trade, confirming both parties’ commitments to international standards and reducing regulatory friction in goods trade. While mutual recognition mechanisms for conformity assessments are not mandated, the agreement does establish a formal subcommittee on standards, technical regulations and conformity assessment procedures. The subcommittee aims to facilitate technical discussions on trade facilitation and oversee regulatory dialogue with the aim of avoiding future trade friction caused by differences in regulation and product standards.

Dispute Settlement: The UK and India have agreed a state-to-state dispute settlement mechanism, consistent with standard practice in modern FTAs. While the mechanism applies to core trade in goods and services and rules or origin, it excludes a wide range of chapters including those focusing on Sanitary and Phytosanitary measures, competition, goods regulatory practices and for a time-limited period, government procurement. The areas excluded from the dispute settlement mechanism are instead subject to softer commitments on disputes without binding enforcement.

When will the agreement be effective and how should I prepare?

The finalisation of the FTA marks a significant shift in the trading relationship between two of the world’s largest economies. While many of the agreement’s headline provisions have been anticipated since the government’s announcement of May 2025, the publication of the full legal text provides important new detail on how the FTA will operate in practice and where the commercial benefits may fall.

Prior to the agreement entering into force, both the UK and Indian governments must complete their domestic ratification procedures and pass relevant enabling legislation. The process varies in duration, with no fixed timeline for when the FTA will take effect. For example, the UK’s most recent bilateral FTAs with Australia and New Zealand took 17 and 15 months respectively between signing and entry into force.

UK businesses should now take the time to review the full text of the agreement, assess the impact on their operations and quantify the scale of opportunity. For support in understanding what the trade agreement means for your businesses, Deloitte’s specialists are on hand to help.