India-UK trade deal kicks in: PM Narendra Modi says boost for farmers & MSMEs

4 min readNew DelhiJul 16, 2026 05:10 AM IST

Britain's Prime Minister Keir Starmer and Prime Minister Narendra Modi of India shake hands after signing a free trade agreement. (AP Photo)

The India-UK Comprehensive Economic and Trade Agreement (CETA), under which 99 per cent of Indian goods entering the UK and 90 per cent of UK goods entering India will either be duty-free or attract reduced tariffs, came into force on Wednesday.

Prime Minister Narendra Modi described the operationalisation of the agreements as “a significant moment in the India-UK partnership”. British High Commissioner Lindy Cameron called it the “new gold standard of trade deals”. Alongside CETA, the Agreement on Social Security (Double Contribution Convention) exempts Indian professionals on temporary UK assignments of up to 60 months from making social security contributions in both countries, reducing costs for employees and employers.

“With the coming into force of the Comprehensive Economic and Trade Agreement and the Agreement on Social Security, our economic linkages are going to get even deeper. Together, these agreements translate our shared ambition into tangible opportunities for our people,” Modi said in a post on X.

He said the trade pact would provide fresh momentum to farmers, entrepreneurs and micro, small and medium enterprises (MSMEs), while giving several sectors “stronger access” to the UK market. He said it would deepen cooperation in technology, professional services and innovation, while supporting greater mobility for skilled Indian talent.

“The social security agreement will provide invaluable support to Indian professionals working temporarily in the UK and strengthen the competitiveness of Indian enterprises,” Modi said. The Prime Minister added that the agreements reflected “the trust between our democracies and our resolve to build a forward-looking partnership driven by trade, technology, investment and innovation”.

Cameron termed it as “the new gold standard of trade deals: pro-worker, pro-innovation, and pro-growth”. “It’s a force multiplier and a template for a future trade agreement,” she said.

Citing UK Minister for Trade, Chris Bryant, she said the UK-India FTA (free trade agreement) “sends a message to the rest of the world that the rules-based order works, and I think those rules, when they are about international trade, are in everybody’s interest and certainly very much in UK-India’s interest”.

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“The UK-India trade deal brings sweeping benefits for a wide range of sectors. From today, import duty on Scotch whisky has been cut from 150 per cent to 75 per cent, which should make a really significant difference to the price the consumer pays,” she said.

Cameron also said that import duties on premium UK-built cars will begin to fall from over 110 per cent to 10 per cent, making British cars cheaper for Indian consumers.

To celebrate the occasion, a special package of select British goods arrived at the British Deputy High Commission in Mumbai on Wednesday morning aboard a British Airways flight. “The package contained goods from the UK benefiting from reduced tariffs, including cosmetics, food products and alcoholic beverages,” said a statement.

The trade agreement, signed in July last year, is expected to benefit a wide range of sectors on both sides, including automotive, manufacturing, consumer goods, creative industries and medical technology. It lowers tariffs across sectors, including textiles, leather, gems and jewellery, engineering goods, marine products, pharmaceuticals and processed food, while expanding market access for services, digital trade and government procurement.

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According to government data, merchandise trade between the two countries stood at US$ 25.1 billion in 2025-26, while bilateral services trade was US$ 35.4 billion in 2024.

The agreement is expected to at least double bilateral trade from the current level of about 48 billion pounds annually by 2030, while boosting long-term economic growth in both countries.

“The agreement, which opens new avenues for trade, investment and innovation, will create unique opportunities for our businesses,” Commerce and Industry Minister Piyush Goyal said on X.

Commerce Secretary Rajesh Agrawal said that goods worth US$ 140 million were shipped on the first day under the agreement. —With PTI

Shubhajit Roy, Diplomatic Editor at The Indian Express, has been a journalist for more than 25 years now. Roy joined The Indian Express in October 2003 and has been reporting on foreign affairs for more than 17 years now. Based in Delhi, he has also led the National government and political bureau at The Indian Express in Delhi — a team of reporters who cover the national government and politics for the newspaper. He has got the Ramnath Goenka Journalism award for Excellence in Journalism ‘2016. He got this award for his coverage of the Holey Bakery attack in Dhaka and its aftermath. He also got the IIMCAA Award for the Journalist of the Year, 2022, (Jury’s special mention) for his coverage of the fall of Kabul in August 2021 — he was one of the few Indian journalists in Kabul and the only mainstream newspaper to have covered the Taliban’s capture of power in mid-August, 2021. ... Read More

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India UK Relations

India Uk trade

Narendra Modi