UK-India trade deal is in place but now UK businesses must make it work

The UK-India trade deal is in place, but whether it delivers is now down to UK businesses.

By 2040, it’s predicted that India will have 149 cities with half a million consumers each – compared with just 53 in the US and 112 in Europe. That’s the scale of the market opened up by the UK-India Comprehensive Economic and Trade Agreement (CETA).

I have worked in the UK-India corridor since India liberalised its economy in 1991 and I have always believed in what the two countries could build together. But I have also watched other trade agreements generate excitement that outpaced reality, and businesses that see this one as a simple green light will be disappointed.

The deal removes formal barriers, but it does not remove the practical ones: local knowledge, regulatory complexity and detailed compliance requirements. CETA will be beneficial, but the opportunity for UK businesses lies in their readiness to realise the true value on offer.

India’s high commissioner to the UK, Periasamy Kumaran, at a ceremony celebrating the UK-India trade dealEastern Eye

And the appetite has been there for some time. Our research in 2024 found that 72 per cent of UK mid-sized businesses said a trade deal with India would encourage them to explore the market. This deal should be the catalyst that finally turns that appetite into activity.

The headline benefits are real. New tariff reductions will allow UK businesses to price much more competitively in India. This varies across sectors, but the most notable wins will be seen in Scotch whisky and spirits, where Indian tariffs are set to drop from 150 per cent to 40 per cent, and in vehicles ,with tariffs falling from more than 100 per cent to 10 per cent over time – although there are strict quotas on how many will qualify for the reduced rates.

For businesses such as Jaguar Land Rover – the largest Indian-owned employer in the UK – that will be a direct and material commercial gain in one of the world’s fastest-growing consumer markets.

But this is where enthusiasm generated by big numbers meets complex paperwork. There are detailed licensing requirements that must be met, and tariff cuts apply only to goods that meet the rules of origin. Origin refers to where something is actually made, rather than where it ships from, so this can get complicated quickly for goods crossing multicountry supply chains. Get it wrong and the consequences can include unexpected duty bills, mispriced contracts and compliance exposure.Reduced tariffs are just one element of the deal. CETA also has a significant focus on services and employee mobility, with greater structure and predictability agreed for visa processing and professionals now able to transfer between UK and Indian branches of a company under clearer terms. The accompanying Double Contributions Convention also introduces a five-year exemption from National Insurance contributions for Indian employees on temporary UK assignments, which lowers the cost of bringing Indian talent here and improves access to a vast professional population.

Anuj Chande OBE Eastern Eye

The deal is not a cure-all, though. Easier employee mobility between the two countries doesn’t erase rising visa costs. The Skilled Worker visa salary threshold rose to £41,700 in July 2025, and HMRC’s position that visa costs should generally be treated as taxable benefits is tightening. This is both a cost and a compliance issue for technology and professional services businesses looking to draw on Indian talent.

The traffic runs both ways. Our latest India Meets Britain Tracker identified 1,912 Indian-owned companies operating in the UK, up 60 per cent compared with the previous year – the highest number since we began tracking in 2014 and the strongest annual increase yet.

They’re already investing in technology, advanced manufacturing, clean energy and consulting, and looking beyond London to opportunities across England. CETA will accelerate this.

What I have learned over three decades of working with both British and Indian businesses is that the opportunity is never uniform. The businesses that succeed will be those that treat India as a market to be understood, not simply entered.

Those that approach trade deals through a narrow duty-saving lens under-realise their value. But those that integrate trade policy with tax, employee mobility and supplychain design achieve durable outcomes. The prizes will go to those who move with knowledge and enthusiasm.

(The author is the head of South Asia Business Group, Grant Thornton UK)