India-UK trade agreement may come into force next month: Commerce Secy
India's Commerce Secretary confirmed that the India-UK Comprehensive Economic and Trade Agreement (CETA) is expected to come into operation "sometime in May" 2026.
The agreement was signed on July 24, 2025, making it the culmination of over three years of negotiations that began in January 2022.
Under the agreement, 99% of Indian exports will enter the UK market at zero duty, while India will reduce tariffs on UK products including automobiles and Scotch whisky.
Commerce Minister Piyush Goyal had earlier indicated the agreement would come into force within 30-45 days.
The India-Oman CEPA is slated to enter into force by June 1, 2026.
The India-New Zealand FTA (announced December 2025) is expected to come into force by approximately April 27 or by September 2026 per some official timelines.
Negotiations for the India-EU FTA, concluded in principle in January 2026, are targeted for completion as a signed agreement this calendar year, with implementation likely in early 2027.
India is also pursuing negotiations for an interim trade deal with the United States, with resumption of talks from April 20, 2026.
Free Trade Agreements: Types and Distinctions
Trade agreements between countries differ in scope and depth. Understanding the distinctions is critical for UPSC.
Key Details
- FTA (Free Trade Agreement): Covers primarily goods — reduces/eliminates tariffs on merchandise trade. Example: India-ASEAN FTA (2010).
- CEPA (Comprehensive Economic Partnership Agreement): Broader than FTA — covers goods, services, and investment. Examples: India-Singapore CEPA (2005), India-UAE CEPA (signed Feb 2022, entered force May 2022), India-Australia ECTA (2022; ECTA = Economic Cooperation and Trade Agreement).
- CETA (Comprehensive Economic and Trade Agreement): Similar to CEPA in scope; the term used for India-UK and India-Canada frameworks.
- CECA (Comprehensive Economic Cooperation Agreement): Covers goods, services, investment, and other areas. Example: India-Singapore CECA.
- Bilateral agreements are between two countries; plurilateral/multilateral agreements involve multiple parties (e.g., RCEP, which India chose not to join in 2020).
The India-UK agreement is branded a CETA — one of India's most significant trade agreements with a major developed economy — covering goods, services, and investment comprehensively.
India's FTA Strategy: Recent Evolution
After a period of caution following India's 2020 withdrawal from RCEP, India pivoted to an aggressive bilateral FTA strategy starting 2022 under the Commerce Ministry's guidance.
Key Details
- India signed the UAE-CEPA in February 2022 (entered force May 2022) — the first CEPA in 10 years at that point.
- India signed the Australia-ECTA in April 2022 (interim goods-focused deal; full CECA negotiations ongoing).
- India's FTA negotiations are led by the Department of Commerce under the Ministry of Commerce and Industry.
- Key negotiating considerations: tariff revenue loss vs. export market access gains; protecting sensitive sectors (dairy, agriculture, automobiles in past negotiations).
- The India-UK deal took 3+ years to negotiate, with key sticking points being immigration/mobility of professionals, Scotch whisky tariffs, and automobiles.
The Commerce Secretary's announcement reflects a "power-packed FTA calendar" for 2026, with multiple agreements entering force simultaneously — UK (May), Oman (June), New Zealand, and EU negotiations progressing.
India-UK Bilateral Trade Relations
India and the UK have historically close economic ties, and the FTA is expected to significantly deepen trade and investment flows.
Key Details
- The India-UK CETA was signed on July 24, 2025, after negotiations launched in January 2022.
- Target: to double bilateral trade to USD 112 billion by 2030 (from approximately USD 36 billion in FY 2022-23).
- Key Indian exports benefiting: textiles, leather, pharmaceuticals, IT services, engineering goods, food products.
- Key UK exports gaining better access: whisky (gradual tariff reduction from 150%), automobiles, medical devices, financial services.
- The UK is outside the EU Single Market post-Brexit — making the India-UK FTA a standalone deal without EU complications.
Entry into force in May 2026 means Indian exporters can begin accessing zero-duty UK market for 99% of goods within weeks, providing an important export boost amid the broader trade disruptions from West Asia and US tariff volatility.
- India-UK CETA signed: July 24, 2025
- Expected entry into force: May 2026 (30-45 days as of early April 2026)
- Zero-duty UK market access for Indian exports: 99% of goods
- Trade doubling target: USD 112 billion by 2030
- India-Oman CEPA: entry into force targeted for June 1, 2026; ~98% of Indian exports get duty-free access to Oman
- India-New Zealand FTA: announced December 22, 2025; entry into force expected April-September 2026
- India-EU FTA: concluded in principle January 27, 2026; covers ~99% of India's export value to EU; covers ~2 billion consumers combined
- India-UAE CEPA: signed February 2022, entered force May 2022
- India's FTA body: Department of Commerce, Ministry of Commerce and Industry