India–UK Free Trade Agreement (CETA)

Yes. The UK and India have a free trade agreement, the Comprehensive Economic and Trade Agreement (CETA), which entered into force on 15 July 2026. It cuts tariffs on goods, adds rules for services, digital trade and procurement, and locks in business travel access. Bilateral trade was £48 billion in 2025, according to the UK government.

Key points

• CETA was signed on 24 July 2025 and has been in force since 15 July 2026, alongside a separate UK–India social security agreement.

• India's government says about 99% of India's tariff lines now enter the UK duty-free. India removes or reduces tariffs on 90% of its tariff lines for UK goods, with some cuts phased over 10 years.

• Services gain certainty, not open borders: useful context for any Indian tech firm weighing a UK subsidiary of an Indian company.

• No new visa routes were created. CETA locks in access to existing routes; UK salary thresholds, sponsorship rules and fees still apply.

• CETA does not change income tax, the India–UK tax treaty, transfer pricing, VAT or GST.

For an Indian technology company, CETA is one input into a bigger decision about how to build the UK business. For British firms heading the other way, read how to set up a company in India from the UK.

Does the UK have a free trade agreement with India?

Yes. The UK–India CETA has been in force since 15 July 2026. It was concluded on 6 May 2025 after fourteen rounds of negotiation and signed in London on 24 July 2025, according to India's Press Information Bureau. Announcing the in-force date on 17 June 2026, the UK government described it as the quickest ever turnaround following signature.

The agreement has 30 chapters, covering goods, services, digital trade, telecommunications, financial services, intellectual property, government procurement (a first for India bilaterally), SMEs and sustainability.

On the UK government's estimates, the deal is expected to increase bilateral trade by £25.5 billion a year in the long run, add £4.8 billion a year to UK GDP and £5.1 billion to India's GDP, and raise UK real wages by £2.2 billion a year. These are long-run model estimates, not forecasts for 2026.

Alongside CETA, the two countries signed a separate Double Contributions Convention on 10 February 2026, which also took effect on 15 July 2026. It is a social security agreement, not part of CETA, but for employers the two arrive together.

What changed for goods: tariffs and rules of origin

The biggest immediate change is on tariffs. According to India's Ministry of Commerce, India secured immediate duty-free access on 99% of its tariff lines, covering nearly 100% of trade value.

UK tariffs that have now fallen to zero include up to 70% on processed food, 21.5% on marine products, 18% on engineering goods and auto components, 16% on leather and footwear, 12% on textiles and clothing, and 8% on chemicals and pharmaceuticals.

In the other direction, the UK government says India will remove or reduce tariffs on 90% of tariff lines, covering 92% of current UK goods imports. After 10 years of staging, 85% of tariff lines will be tariff-free.

Lower tariffs are only available if the goods qualify under the rules of origin. UK exporters claim preference in India by completing a self-certified origin declaration.

GOV.UK says UK exporters must register with HMRC before completing origin declarations, send the declaration to India's CBIC for authentication, and keep records for at least 5 years. On the Indian side, CBIC has notified the origin rules and an authentication process for UK origin declarations. Indian exporters selling to the UK should check the equivalent HMRC requirements before relying on the preference.

A common mistake is assuming "Made in India" or "Made in UK" is enough. A product assembled in Pune from largely imported components may not qualify. Check the product-specific rule before pricing a contract on the lower tariff.

What changed for services and digital trade

For services, CETA mainly adds certainty and transparency rather than new market access overnight. India's government says the UK made one of its most comprehensive services commitments, covering 137 sub-sectors of export interest to India, including IT and IT-enabled services, professional, education and business services.

The UK government says UK suppliers gain greater certainty in India in sectors including telecommunications, environmental and construction services, and that UK ownership of Indian insurance and banking firms is secured at up to 74%.

On professional qualifications, the annex on professional services commits both sides to identify and encourage relevant bodies to negotiate recognition agreements. That is a framework, not automatic recognition. An Indian chartered engineer or accountant does not become UK-qualified because of CETA.

The digital trade chapter (Chapter 12) supports legal recognition of electronic contracts and electronic authentication, paperless trading, and protection of source code: GOV.UK says software owners cannot be made to transfer or disclose source code. On cross-border data flows and data localisation, the agreement only gives the UK an opportunity to negotiate rules with India when India agrees similar commitments with other partners.

There is no binding free data flow commitment today, and UK data protection law continues to apply to personal data.

Government procurement is new. The UK government says India's covered federal entities publish about 40,000 tenders a year worth at least £38 billion, and UK suppliers will be treated as Class 2 local suppliers under Make in India where at least 20% of the product or service is from the UK.

Business mobility: what the agreement does (and doesn't) do for visas

CETA does not create a new visa. The UK government's business mobility explainer says so directly: "We have not created any new visa routes in this agreement." What it does is lock in access to existing routes, so a future UK government cannot close them to Indian businesses in the covered sectors.

What CETA does not do matters as much. The explainer states that the deal does not lock in sponsorship processes or criteria, that the UK can amend salary thresholds, and that Indian workers and their dependants still pay the Immigration Health Surcharge (£1,035 a year for adults).

Sponsors still pay the certificate of sponsorship fee and Immigration Skills Charge. A UK employer still needs a Home Office sponsor licence. For how the routes compare in practice, see our guide to the global business mobility visa versus the Skilled Worker visa.

The bigger cost change for assignees is the social security agreement. Qualifying employees sent temporarily between the two countries can stay in their home system for up to 60 months, up from the 36 months originally announced, supported by a certificate of coverage (form CA9107 from HMRC for UK workers, or from the EPFO for Indian workers).

GOV.UK notes that employees already working in the other country before 15 July 2026 are not treated as detached workers. We explain the employer steps in our guide to the UK–India double contribution convention.

What CETA means for Indian tech companies entering the UK

For an Indian IT, SaaS or digital services company, CETA makes the UK more predictable rather than suddenly cheaper. In practice:

• People: the intra-company and expansion routes are locked in, and the social security agreement can remove duplicate contributions on assignments of up to 5 years. Visa costs and salary floors are unchanged.

• Contracts: UK commitments covering IT and IT-enabled services give more certainty that today's market access will not be withdrawn, and electronic contracts and signatures are recognised.

• Tax: nothing changes. UK corporation tax, VAT, the India–UK tax treaty and transfer pricing apply as before. CETA does not reduce withholding tax on fees for technical services or remove permanent establishment risk.

Take a ₹120 Cr Pune engineering services company with eight engineers rotating to UK client sites. CETA does not make those engineers' visas cheaper, but the social security agreement may stop the business paying both Indian provident fund and UK National Insurance on the same salaries, provided each assignment is certified. That saving is real and specific; "the FTA helps us" is not.

What CETA means for UK firms entering India

For a £2–50m UK technology or professional services firm, CETA improves the setting for selling into India and building teams there, but does not replace India's own investment rules. Foreign direct investment, entity choice, transfer pricing and GST work exactly as before.

The practical gains are lower tariffs on UK goods, the procurement chapter, UK insurance and banking ownership secured at up to 74%, continued access for UK professionals travelling to India, and the 60-month social security period for UK staff seconded to set up the Indian operation.

A UK firm deciding between a subsidiary, a branch or a liaison office still needs to work through RBI and FEMA rules for each, which we cover in our guide to choosing between a subsidiary, a branch office and a liaison office in India.

Advantages and disadvantages of the India–UK free trade agreement

Advantages for business: lower or zero tariffs on most goods traded; more certain services access; locked-in business mobility; recognised electronic contracts; procurement access in India; and, through the companion agreement, no double social security for qualifying assignees.

Limits: many Indian tariff cuts on UK goods are phased over 10 years; rules of origin must be met and documented; there is no binding data flow commitment; professional qualifications are not automatically recognised; and immigration costs, thresholds and sponsorship are unchanged.

The Greenwolf view

A trade agreement changes the rules of the road, not the business model. Commercial design comes first, and tax follows functions, risks and substance. CETA does not change the second half of that sentence at all.

The useful question is not "does the FTA help us?" but "which part of our model does it touch?" Before acting on CETA, we work through:

• Goods or services? Tariff savings matter for exporters of goods that meet the rules of origin. For tech companies, the gains are in people and certainty.

• Who contracts with the customer? India or the UK entity. That decision drives VAT, permanent establishment risk and transfer pricing, none of which CETA alters.

• Who moves, for how long? The visa route, the 60-month social security window and the payroll set-up should be designed together.

• What should genuinely sit in Britain (or India)? Sales leadership, account management, delivery or R&D. The answer shapes margins and where profit should be taxed.

• Ownership and funding: ODI from India and FDI into India are governed by each country's own rules, unchanged by CETA.

Planning a move? Read our corridor guide on how Indian IT, SaaS and digital companies expand to the UK, and follow Greenwolf Advisors on LinkedIn for #GoGlobalWithGreenwolf updates.

This article is general information, not advice for a specific case. Check the official texts and take advice before acting on any tariff, origin, visa or tax point.