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      After years of negotiation, the UK and India have finally signed the Comprehensive Economic and Trade Agreement (CETA) on 24 July 2025. This is a big deal for both countries - and for UK businesses looking to grow in one of the world’s fastest-expanding markets. The numbers are impressive: CETA is expected to boost the UK’s GDP by £4.8 billion and increase bilateral trade by £25.5 billion every year. But what does it actually mean for you and your business? Let’s break it down.

      This agreement is about more than just lower tariffs. It’s designed to make it easier to do business, move professionals between countries, and diversify supply chains. India’s rapid economic growth and expanding sector expertise - including in high tech - make it an attractive alternative for UK businesses. Plus, as India’s middle class grows, it’s set to become one of the world’s largest consumer markets.

      At the end of this blog, we’ve summarised what we think businesses should be doing, but for now:

      Jeeven Pawar

      Director

      KPMG in the UK

      Where do things stand?

      CETA is one of the most ambitious trade deals the UK has signed since Brexit. It opens up a huge range of opportunities across sectors like automotive, alcoholic drinks, cosmetics, food, jewellery and retail.

      Here’s the headline news:

      • India is cutting or removing tariffs on 90% of its tariff lines (that’s 92% of goods), with 64% of those goods getting duty-free access as soon as the agreement kicks in. The rest will be phased in over the next decade.
      • The UK is scrapping tariffs on 99% of Indian imports straight away, giving UK consumers and businesses access to more products at better prices.
      • Implementation: The UK is going for a simple approach - goods are either zero-rated or excluded from CETA right from the start. India’s taking a more gradual, product-by-product route. The CETA will likely come into force next year post completion of ratification process by both countries.

      What does this mean for key UK sectors?

      • Imports into the UK: Lower-end EVs and hybrids can come in duty-free (within quota) from year 6.
      • Exports to India:
        i. High-end petrol/diesel cars: Duties drop from a 110% to just 10% over 5 years (in-quota).
        ii. Out-of-quota cars: Duties fall from 110% to 50% over 10 years.
        iii. Lower-end EVs/hybrids: Duty-free, no quota, from year 6.
        iv. High-end EVs/hybrids: Duties cut from 110% to 10% (in-quota) over 15 years, starting year 6.

      • Exports to India:
        i. Scotch whisky: Duties are halved immediately (from 150% to 75%), and will fall to 40% over 10 years.
        ii. Other alcoholic drinks: Duties cut to 110% right away, then down to 75% over 10 years. (Minimum import prices are in place to protect Indian producers.)

      • Apparel and textiles will benefit from duty-free access from day one on both sides

      • Exports to India:
        i. Duties on UK chocolates drop from 33% to 0% over 7 years.
        ii. Duties on most varieties of Fish and Lamb meat would drop from 33% to 0% from day one.
        iii. Cheese, unfortunately, is excluded and therefore would continue to attract duties at current rates.

      • Exports to India:
        i. Most UK chemicals and pharma products will be duty-free immediately.

      The legal stuff: What’s new in this agreement?

      Rules of Origin

      • Local content: CETA’s rules are a bit different. The required Qualifying Value Content (QVC) or other qualifying criteria varies depending on the nature of the goods.

        i. Standard QVC, too, will differ based on the computation method - 40% (of ex-works price) or 45% (of FOB value) under build-down method and 35% under build-up method
        ii. Gems and jewellery have a much lower QVC requirement (just 3–7% for most precious metal jewellery)

      • Special flexibility: For example, bottling of alcoholic drinks can even happen in third countries.
      • Low value exemptions: Goods worth £1,000 or less coming into the UK don’t need proof of origin paperwork.

      Proof of Origin and Admin

      • UK importers: You can use an origin declaration, certificate of origin, or even importer’s knowledge as proof.
      • Indian importers: Only an origin declaration is accepted.
      • Multiple shipments: UK importers can use one declaration for multiple identical imports over 12 months.
      • Authentication: India will check origin declarations before importers can claim lower tariffs - so UK exporters should be ready for a bit more admin here.
      • Unassembled goods: You can use a single origin declaration for goods shipped in parts, but watch out for how this affects classification.
      • Confidentiality: Importers can’t ask exporters for confidential info - something to keep an eye on for compliance.

      Other points

      • Usual trade agreement provisions apply (non-alteration, third-party invoicing, etc.).
      • Cumulation: This is a big win - UK manufacturers can use Indian parts and still get preferential tariffs when exporting finished goods back to India.

      What should UK businesses be doing now?

      With phased implementation and sector-specific rules, it’s important to get ahead of the curve. Here’s what we recommend:

      • Map your supply chain

        Identify where you can leverage CETA benefits and where new requirements might apply. Consider how shifting some sourcing or manufacturing to India could help future-proof your business as global supply chains diversify.

      • Check product QVC requirements

        Make sure your goods meet the new rules on local content and origin - especially if you’re looking to tap into India’s growing high-tech manufacturing base.

      • Model the impact

        Assess how phased tariff reductions and new market access will affect your pricing, margins, and competitiveness - both in India and as part of a broader Asia strategy.

      • Talk to your partners

        Collaborate with Indian suppliers and customers to optimise sourcing, distribution, and innovation. India’s sector expertise is growing fast, so there may be new opportunities to co-develop products or tap into local talent.

      • Stay compliant

        Keep up with the new admin processes, especially around proof of origin and documentation, to ensure you’re making the most of the agreement’s benefits.

      Final thoughts

      The UK-India CETA is a game-changer for businesses looking to expand into India or strengthen existing ties. As global supply chains shift and move towards a decentralised approach, India stands out not just for its economic growth, but also for its policies/ incentives favouring manufacturing and increasing sophistication in sectors like technology, manufacturing and services. Add to that a booming consumer market, and the opportunities are hard to ignore.

      There are big rewards on offer, but also some complexities to navigate. By taking action now - mapping your supply chain, reviewing your products, and staying on top of compliance - you’ll be well placed to make the most of this new era in UK-India trade.

      If you’d like to talk through how CETA could impact your business, or need help getting ready, our team is here to help. Get in touch - we’d love to support you on your next steps.

      Jeeven Pawar

      Director

      KPMG in the UK