UK-India trade deal

Approximate read time: 25 minutes

The House of Lords is due to debate a take note motion on the Comprehensive Economic and Trade Agreement between the UK and India on 4 March 2026.

The agreement is subject to the procedure for the scrutiny of treaties set out in the Constitutional Reform and Governance Act 2010. The deal was laid before Parliament on 21 January 2026, and the parliamentary objection period expires on 5 March 2026. This would conclude the parliamentary scrutiny process required before the government can ratify the protocol under the procedure set out in the 2010 act.

The motion for the Lords debate will be moved by Lord Goldsmith (Labour), who also chairs the House of Lords International Agreements Committee. The committee published a report on the agreement on 3 February 2026, ‘Scrutiny of international agreements: UK-India Comprehensive Economic and Trade Agreement’ (HL Paper 253 of session 2024–26). The committee considers and reports to the House of Lords on treaties that are laid before Parliament under the terms of the Constitutional Reform and Governance Act 2010. A summary of the committee’s findings and recommendations is contained in section 3 of this briefing.

1. Statistics on UK trade with India

UK-India trade totalled £47.4bn for the four quarters to the end of quarter 3 (Q3) 2025 (the latest figures available). This was an increase of 11.7% or £5bn (in current prices) from the four quarters to the end of Q3 2024.^[1] The UK has a trade deficit with India; the value of UK imports from India are £9.6bn higher than the UK’s exports to India.

The following tables give further breakdowns of the value of UK-India trade in the four quarters to the end of Q3.

Table 1. Value of exports and imports, broken down by goods and services

(Department for Business and Trade, ‘Trade and investment factsheets: India’, 2 February 2026, p 4)

Table 2. Top five goods types exported and imported between the countries (by value)

(Department for Business and Trade, ‘Trade and investment factsheets: India’, 2 February 2026, p 8)

Table 3. Top five services types exported and imported between the countries (by value)

(Department for Business and Trade, ‘Trade and investment factsheets: India’, 2 February 2026, p 10)

India was the UK’s 11th largest trading partner in the four quarters to the end of Q3 2025. The International Monetary Fund (IMF) expects India’s import and export numbers to continue to grow over the coming years. It estimates India will have the third highest GDP internationally by 2030.^[2] The IMF currently ranks India fourth in terms of GDP.

2. Objectives and contents of the deal

The India-UK trade agreement was signed on 24 July 2025. It followed multiple rounds of negotiations, which concluded in May 2025. Negotiations for the deal were started by the previous Conservative government in 2022.^[3]

Speaking about the significance of the deal, the government highlighted the historic ties between the countries and India’s high rate of growth.^[4] It also noted that India has high tariffs and other regulatory restrictions that hinder trade and business with the country. For example, the government stated:

There have been significant challenges for UK businesses seeking to access this growing market. India has the highest average tariffs of any G20 economy, with some products facing duties above 100%. It is ranked as the eighth most restrictive services market by the Organisation for Economic Cooperation and Development and has an uncertain regulatory environment. Risk and cost have historically hindered UK companies looking to move or expand into India.^[5]

The government hopes the deal will address these issues and strengthen the economic relationship between the countries. It stated:

Global events in the last few years have demonstrated the value of diverse and resilient supply chains and certainty in trading relationships. This deal will strengthen the UK partnership with India, bringing down barriers to trade and granting stability to businesses in both countries.

Greater ties and access to India present significant opportunities.^[6]

The deal’s anticipated economic and trade benefits outlined by the government include:

• increasing bilateral trade by £25.5bn, of which £15.7bn is expected to come from higher exports from UK businesses into India
• UK GDP to increase by £4.8bn (0.1%) and UK wages to increase by £2.2bn annually over the long term

To achieve this, the government stated the deal would provide for:

• Significant cuts to the tariffs applied to UK goods exported to India, including in food and drink, cosmetics, automotive and other manufacturing sectors. This would see 64% of tariff lines eligible for tariff-free imports into India from day one and further reductions applied over a staging period of 10 years. For example, UK whisky/whiskey exports would see tariffs reduced from 150% to 75% on day one, and staged to 40% from year 10 onwards. In addition, 99% of goods imported from India would become tariff-free.
• Better market access for services trade with India, particularly in telecommunications services, environmental services and construction services. For example, UK firms in these sectors will face less restrictions and will be treated in the same manner as Indian businesses by the Indian government.
• Measures to improve the logistics of businesses trading with India (for example, faster customs processing) and to improve collaboration on new technologies.
• Access for UK businesses to India’s public procurement market, comprising “approximately 40,000 tenders with a value of at least £38bn a year”.

The government said the deal would benefit every UK nation and region and consumers. For example, it said the deal could deliver cheaper prices and more choice on Indian exports such as clothes, footwear and food products.

In addition, the government said the deal supported the UK’s net zero ambitions and “championed our values”. It stated:

This deal also supports our net zero ambitions—securing the highest levels of environmental commitments India has ever agreed to in a deal. Together we are promoting green trade and facilitating clean growth, making it easier for us to trade in products such as renewable energy equipment. UK businesses will also have new access to government procurements in the green infrastructure and energy sectors—using their expertise to support India’s own transition. Alongside these, we have committed to promote action on issues including tackling air pollution, defending the marine environment, reducing deforestation, protecting biodiversity, and reducing waste.

We have championed our values—securing India’s first ever chapters in a free trade agreement on anti-corruption, labour rights, gender, and development. We have protected the NHS, ensured the points-based immigration system is not affected, upheld our high food standards, and maintained our animal welfare commitments.^[7]

The text of the deal, officially titled the Comprehensive Economic and Trade Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Republic of India (CETA), is split into 30 chapters. Each chapter covers a different area, such as trade in goods and services, financial services, government procurement, intellectual property, and the environment.

A chapter by chapter summary is provided in the Department for Business and Trade paper ‘UK-India trade deal: Conclusion agreement summary’ (24 July 2025).

The EU has also recently finalised a trade deal with India and announced a framework for an interim trade agreement with the United States. Details of these can be found at:

• European Commission, ‘EU and India conclude landmark free trade agreement’, 26 January 2026
• European Commission, ‘The EU-India trade agreement’, accessed 12 February 2026
• The White House, ‘United States-India joint statement’, 6 February 2026

3. House of Lords International Agreements Committee’s assessment

The House of Lords International Agreements Committee published its report on the India-UK trade agreement on 3 February 2026. Its inquiry on the agreement involved several evidence sessions and a roundtable with business representatives. The committee had also published an earlier report, back in July 2022, on the previous government’s initial negotiating objectives for the deal.^[8]

Overall, the committee welcomed the deal. It said the deal was a significant achievement due to India’s generally protectionist approach and that it would provide some stability for UK trade and businesses at a time of many geopolitical challenges. For example, it said the deal provided alternative trading opportunities for the UK and India amid concerns about trade with countries such as China and the US. However, the committee did think the deal could have gone further in some respects and expected many UK exporters not to experience the benefits for a few years. It stated:

We welcome the historic agreement reached with a key partner and growing market in the Indo-Pacific, which is particularly important given the geopolitical challenges. We recognise that this context may have both precipitated and shaped the final outcome. Overall, the agreement will be helpful to UK businesses as they seek to diversify and derisk their supply chains.

We note that the benefits for UK exporters may take some time to materialise, on account of the phasing and quotas set out in the agreement. In contrast, many of the benefits for Indian exporters materialise immediately, reflecting the relative openness of the parties’ respective economies prior to the agreement.^[9]

Trade in goods

In its chapter about the deal’s provisions regarding trade in goods, the committee noted issues raised by the UK’s food and drink sector. In particular, witnesses had expressed concern the agreement was weighted in favour of Indian suppliers and there were no staging or quotas introduced to help the UK’s domestic industry adapt.^[10] This point was made particularly strongly for the dairy industry, with the committee highlighting the following comments:

The National Farmers’ Union (NFU) and DairyUK (the trade association for the UK dairy supply chain) raised concerns about the additional exposure of the UK dairy market to “the world’s largest dairy producing nation”, without reciprocal access to a new dairy market for UK producers. DairyUK said that the agreement “poses a serious competitive challenge to the UK dairy sector in the medium term” without providing any countervailing benefits, while the NFU highlighted in particular the “cumulative impact” of free trade agreements on the dairy sector.^[11]

Based on this, the committee recommended the government assesses the impact of the agreement on the domestic sector, sets out measures it will take to address this impact, and also assesses the cumulative impact of trade agreements on the UK agricultural sector.^[12]

Other concerns and recommendations raised in this chapter of the committee’s report included:^[13]

• The new arrangements on textiles may disadvantage countries trading under the UK’s ‘Developing countries trading scheme’. It recommended the government assess this.
• The government should take steps to support businesses (particularly small and medium sized businesses (SMEs) to navigate the rules of origin provisions set out in the agreement and other non-tariff barriers (such as the regulatory environment of India and its separate states).
• The government should engage with India if its system of ‘quality control orders’ (regulatory measures introduced at India’s border to regulate the quality and safety of goods) undermines the objectives of the agreement to provide better access to Indian markets for UK exporters.
• The government should continue to work on expanding the procurement opportunities in India provided by the agreement. For example, the committee noted that it currently only extends to central government entities and therefore excludes a large proportion of both countries’ procurement markets.

Services sector

The committee argued that the agreement did not significantly liberalise services trade, particularly in comparison to its measures on trade in goods. It said the lack of “new market access for financial services and legal services access is particularly disappointing, given their importance for the UK”.^[14] It also highlighted that trade in services currently makes up a larger proportion of UK-India trade.

The committee therefore asked the government to set out how it will pursue the liberalisation of services trade further with India to maximise benefits for the UK. The committee particularly stressed the importance of pursuing ways to bolster legal services trade, noting that this sector was omitted from the agreement entirely. It continued:

We view this as a missed opportunity given that legal services comprise a strategically important and growing sector of trade, both in their own terms and in relation to supporting trade in other sectors.^[15]

Double contributions convention and other matters covered by the report

The committee welcomed the commitment to pursue mutual recognition of professional qualifications (MRPQ). It noted that provisions on this were not set out in the deal text itself, but that it had set expectations that agreements would be reached within 36 months of the deal entering into force.^[16] To achieve this goal effectively, the committee recommended the government “brings forward plans to support professional associations in securing such agreements based on best practice of successful negotiations, in order to ensure that any MRPQ agreement with India delivers as much benefit as possible to businesses”.

The report also contained commentary on provisions about business mobility (the temporary movement of professionals between the two countries to deliver on business opportunities) and an accompanying commitment for the countries to negotiate a ‘double contributions convention’ (DCC). The government has explained this as follows:

The DCC will support business and trade by ensuring that employees moving between the UK and India, and their employers, will only be liable to pay social security contributions in one country at a time. The DCC will also ensure that employees temporarily working in the other country will continue paying social security contributions in their home country, preventing the fragmentation of their social security record.

[…]

The UK and India have agreed to negotiate a DCC so that it comes into force alongside the CETA. Once the DCC is in force, the UK and India have agreed that there will be no ‘double contributions’, and the 52-week exemption period will be extended reciprocally to 36 months for detached workers.^[17]

Concerns have been raised that the DCC will come at a cost to UK taxpayers, may increase net migration, and may make it easier for firms to employ cheaper workers from India.^[18] The government disputes this, saying that there would be costs and measures in place to protect against these issues.^[19]

The committee welcomed the commitment to the DCC, noting evidence from witnesses that it is expected to create savings and lessen administrative burdens for businesses and consumers.^[20] However, it did call on the government to conduct an impact assessment on the consequences of exempting certain Indian workers from UK national insurance contributions and to clarify whether UK workers who have already contributed to India’s national insurance scheme may be eligible for refunds.

Looking at the agreement more generally, the committee stressed the importance of monitoring, implementation, and support for businesses (particularly SMEs) to ensure its success. It noted that these issues were addressed to some extent in the agreement and in associated government documents. For example, it noted that the Department for Business and Trade is due to monitor its implementation. Despite this, the committee made further recommendations in this regard, including:

We recommend that the government publish data on tariff preference utilisation rates in trade with India, as it already does for a number of countries. This would require coordination with the Indian authorities.

We call on the government to ensure that particular attention is paid to supporting SMEs in being able to take full advantage of the [agreement]. This is likely to include drawing on measures set out in the government’s trade strategy and the UK’s small business strategy.

We call on the government to keep Parliament informed, via the relevant committees, as to how it is supporting UK businesses to take advantage of the agreement, and the extent to which this is translating into improved uptake and utilisation.^[21]

Finally, the committee discussed the importance of the agreement in the context of other government policies and commitments on a closer relationship between the UK and India. These policies are detailed on pp 48–9 of the committee’s report, and include references to the UK’s ‘National security strategy’ (August 2025) and the new ‘India-UK vision 2035’ policy paper (July 2025). Taking all this together, the committee recommended the government works on ways to ensure the agreement is implemented comprehensively and links to its wider goals for building upon its relationship with India:

There are a range of existing dialogue mechanisms and networks for further enhancing the UK-India bilateral relationship in both substantive and symbolic terms. The committee recommends that the government works to ensure that the full benefits of the agreement are delivered by putting in place measures to implement and utilise the agreement as comprehensively as possible, in ways which recognise the wider, dynamic geopolitical environment in which the agreement sits. This is likely to include drawing on initiatives set out by the government in its trade and industrial strategies.

Our inquiry has highlighted the need for the UK-India trade agreement to be a living instrument and not a static one. It is clear that there would be mutual benefit to both parties in further strengthening the relationship, particularly in areas not included in the agreement. Given the size and significance of India, we recommend that the government give a high priority to that objective.^[22]

At the time of writing, the government had not published a response to the committee’s report.

4. Statements on the recognition of environmental, health and food standards

The potential impact of the UK-India trade agreement on the UK’s standards for human, animal or plant life or health, animal welfare, and the environment was considered in the following reports:

• Trade and Agriculture Commission, ‘Advice to the secretary of state for business and trade on the UK-India free trade agreement’, October 2025, CP 1420
• Department for Business and Trade and Department for Environment, Food and Rural Affairs, ‘Section 42 report: Comprehensive Economic and Trade Agreement between the United Kingdom of Great Britain and Northern Ireland and India’, 21 November 2025 (this report was required to meet the conditions of section 42 of the Agriculture Act 2020)

The reports concluded that the deal would be consistent with and did not require the UK to change existing statutory protections in these areas.^[23] The second report noted some concerns had been raised about India’s use of pesticides and antibiotics and how this may not meet the UK’s limits or rules on their use in products. The report stressed that all food imports must be within the UK maximum residue levels for pesticides, and that this is enforced via checks and samples at the border.^[24] The UK’s food standards agencies stated in the report:

Stakeholders have expressed concerns regarding food production standards in foods imported from India, underscoring the importance of maintaining confidence in regulatory oversight. The UK maintains a robust and responsive border control system designed to manage emerging risks effectively and ensure imported foods meet UK import standards. The provisions within the trade agreement support this approach, enabling the implementation of emergency measures when necessary to safeguard public health and food safety.^[25]

Similarly, the government has said “there is nothing in the agreement that will compromise the UK’s high food standards”.^[26] It explained that imports will need to meet the same respective UK and Indian food safety and biosecurity standards.

5. House of Commons Scrutiny

5.1 Business and Trade Committee

The House of Commons Business and Trade Committee published its report on the UK-India trade deal on 21 January 2026.^[27]

The committee welcomed the deal, describing it as “the UK’s most economically significant bilateral free trade agreement since leaving the European Union”.^[28] It noted India’s growing international importance and stated that, in light of other agreements the UK had reached (including with Japan, Australia and other countries covered by the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)), the deal “embeds the UK as one of the most economically integrated non-regional partners in the Indo-Pacific and supports the government’s wider strategy for the region”.

However, the committee stressed that fully realising the agreement’s promise would rely on effective implementation and monitoring and clear ownership within government. For example, it cited the importance of navigating India’s “extensive non-tariff barriers”, including regulatory complexity and quality control orders.^[29] In addition, the committee made the following points and recommendations about various aspects of the deal:

• On goods trade, the report noted the risks of administrative burdens and long staging periods reducing benefits. The committee therefore called on the government to publish data on how widely tariff preferences were being used and explain any shortfalls in uptake. It also noted concerns raised by some sectors (for example, the UK dairy and textiles sectors) about the deal’s impact. It said the government must ensure that “trade remedies and bilateral safeguard mechanisms are accessible, timely and proportionate”, and were “supported by clear guidance for businesses and active monitoring of sensitive sectors”.^[30]
• On services, the committee stated that the agreement provided greater certainty for UK providers, but limited additional market access.^[31] It believed that reaching an agreement on the mutual recognition of qualifications would be important to the success of this part of the deal. It therefore called on the government to identify priority sectors and set out how it intends to progress arrangements for optimal commercial value.
• The committee also noted that the deal did not include a chapter on investment and there was no standalone bilateral investment treaty.^[32] It said that the lack of clarity in this area was of concern to shareholders and meant that “enhanced investor protection remains an ambition rather than a secured outcome”. The committee viewed this as “unfinished business” and called on the government to push ahead with further negotiations in this area.

More details can be found in the full committee report: ‘UK-India Comprehensive Economic and Trade Agreement (CETA)’ (21 January 2026).

5.2 Debate in the House of Commons

The House of Commons debated the trade deal on 9 February 2026.^[33]

Secretary of State for Business and Trade Chris Bryant spoke about the deal’s anticipated economic benefits and how the government would seek to support businesses to make the most of it.^[34] He hoped the deal would enter into force by the end of the summer. He also spoke about how the government intended to further develop the UK’s relationship with India:

This is also not the full stop in our developing relationship with India. Vision 2035, agreed with India alongside the free trade agreement, sets out a shared framework for deeper co-operation across technology, defence, climate and strategic exports, reinforcing the long-term direction of the bilateral partnership. We will also try to resolve other market access issues not solved in the free trade agreement—for example, legal services, recognition of qualifications and other specific state-level barriers. The UK is open to continuing negotiations for a bilateral investment treaty, as long as it works for UK businesses.^[35]

Shadow Business Secretary Andrew Griffith welcomed the deal, but believed it could have gone further, particularly on services trade and investment.^[36] He said that achieving agreement in these areas had been an important objective for the previous Conservative government. Speaking about the services provisions in particular, Mr Griffith stated:

I am afraid it appears that the government have accepted a deal that is disappointingly thin on the sectors where Britain leads the world. The inclusion of services in this deal was the number one priority of the previous government’s negotiations. Instead, this deal settles for locking in existing levels of liberalisation—all good—rather than breaking new ground on services. There is an absence of provisions for mobility to allow our service industries to really integrate in India, restricting our consultants, engineers and architects from practising on the ground.^[37]

He also raised significant concerns about the proposed agreement on a DCC, stating that it would be unfair on British workers and could lead businesses to seek cheaper workers from India.^[38] He said that the previous Conservative government had viewed a DCC as a red line in negotiations.

Overall, he concluded:

We support having a sovereign trade policy, and this is an excellent example of where it could have advantages. We are talking about one of the largest economies on the planet, which is growing approximately five times faster than the European Union. However, the deal could have been better. We are passionate about supporting our investors, lawyers, engineers, scientists and the wonderful services industry. We believe that they can compete anywhere in the world, provided that the field is level and the rules are fair, but we did not need to get a “good enough” deal across the line.^[39]

Chris Bryant sought to address the concerns about the proposed DCC in his closing remarks. He said similar agreements had been reached with other countries and it was not expected to lead to British workers being undercut. He also stressed Parliament would scrutinise the text of the finalised DCC deal:

The previous Conservative government made almost identical arrangements with a large number of countries, including Chile, Japan, South Korea, all of the EU, Iceland, Liechtenstein, Norway, Switzerland, Barbados, Canada, Jamaica, Mauritius, the Philippines, Bosnia and Herzegovina, North Macedonia, Serbia, Montenegro, Kosovo, Turkey and the United States of America. This deal will not undermine British workers […] and it will not make it cheaper to use Indian workers. This agreement is about highly skilled workers employed by Indian companies on a temporary basis paying contributions to their own country rather than in the UK. The deal has not finally been struck; negotiations are ongoing. That deal will be subject to its own process of going through the House, during which members will be able to raise points.^[40]

Similarly, the Liberal Democrat spokesperson, Charlie Maynard, welcomed the economic benefits the deal could bring, but raised other issues. For example, he highlighted concerns about the “clauses in the agreement on labour, the environment and human rights being characterised by a pattern of aspirational language and a lack of enforceability, with the result that they are not subject to the dispute settlement mechanism”.^[41] He also raised India’s business dealings with Russia and the UK importing “Russia-originated” petrochemicals from India.^[42] He questioned how this was dealt with during the negotiations for the trade deal.

Mr Bryant responded to the concerns about energy or goods originating from Russia as follows:

I completely agree with him that we need to debilitate the Russian system as much as possible. We have introduced sanctions on entities, including India’s Nayara Energy Ltd, to ensure that we disrupt Russia’s energy revenues. We are undermining the shadow fleet wherever possible. We have announced a further 500 sanctions.

[…]

On 25 October, we said that we will extend our ban on the import of oil products refined in third countries using Russian crude oil.^[43]

6. Read more

The House of Commons Library has also published a briefing on the UK-India trade deal: ‘UK-India free trade agreement’ (12 February 2026). Chapter five of the briefing covers stakeholder views, including from representatives of civil society and agriculture.

Readers may also be interested in the following articles on the deal:

• Chatham House, ‘India–UK free trade agreement signals deepening bilateral relations’, 8 May 2025
• UK in a Changing Europe, ‘The UK-India FTA shows the challenges of delivering measurable economic growth through trade deals’, 3 November 2025
• Economist, ‘The Britain-India trade deal is a sign of things to come’, 7 May 2025
• Financial Times (£), ‘India embraces free(er) trade’, 8 February 2026

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