India-UK FTA: Near-total tariff elimination offers maximum gain for labour-intensive sectors, processed food exporters

The Comprehensive Economic and Trade Agreement (CETA) between India and the United Kingdom provides near-complete tariff elimination for Indian exporters, especially its labour-intensive sectors, processed food items, and other high-tariff product segments.

“This will go a long way to mitigate external shocks while unlocking untapped market potential. This will also enable India and the UK to tailor their partnership based on complementary strengths, be it in technology, manufacturing, or services. As the global trade order evolves, such bespoke economic partnership will be key to enhancing resilience and driving India’s long-term growth ambitions,” Anil Talreja, Partner, Deloitte India, said.

Previously subject to duties of up to 12%, the textiles and clothing sector has now been completely liberalised for Indian exports to the UK. The elimination of tariffs enhances India’s competitiveness against countries such as Bangladesh and Vietnam and boosts large-scale exports of value-added garments.

“India-UK FTA will not only give competitive market access to the Indian apparel products in the UK market, but also increase the trust and reliability factor by streamlining customs procedures and mutual recognition of standards, thereby reducing the compliance burdens for the Indian apparel exporters.  With duty-free access, the apparel exports to the UK will witness a renewed thrust and momentum in the coming years. The deal is a testimony of a shared commitment of deepening cooperation between two great nations,” Sudhir Sekhri, Chairman Apparel Exports Promotion Council (AEPC), said.

Leather and Footwear products, a category that earlier faced duties of up to 16% have now been brought down to zero, marking a significant win for exporters, especially in states like Uttar Pradesh and Tamil Nadu. Similarly, gems & jewellery, furniture, and sports goods sectors, which previously attracted duties of up to 4%, will benefit from full duty elimination and boost exports of handcrafted, artisanal, and design-intensive products. Marine and Animal Products, where tariffs of up to 20% have been reduced to zero, will help exporters of seafood, dairy, and meat products. Tariff elimination on vegetable oils and plant-based products will benefit exporters of edible oils, oilseed derivatives, and other plant-based commodities. This will also support exports of packaged foods, tea, coffee and spices, which are vital to India’s agri-processing sector and rural economy. Chemicals, electrical machinery, mechanical machinery, and plastics/rubber sectors are also expected to gain.

“The India–UK Free Trade Agreement marks a pivotal moment - not only for boosting bilateral trade volumes, but for sparking employment and industrial renewal across both economies. By unlocking £25.5 billion in annual trade, the agreement is set to drive job creation in key sectors including textiles, engineering, pharmaceuticals, and clean energy,” Pallavi Bakhru, Partner and UK Corridor Leader, Grant Thornton Bharat said.

“Across cities from Ludhiana to Pune and Manchester to the Midlands, businesses will benefit from reduced tariffs, smoother talent mobility, and expanded market access. The inclusion of professional services and mutual recognition of qualifications will further accelerate high-skilled employment opportunities, especially in IT, finance, and design. In effect, this corridor represents a powerful employment multiplier that aligns economic ambition with inclusive growth," he adds.