In July 2025, the United Kingdom and India entered into a Comprehensive Economic and Trade Agreement (CETA or FTA), bringing tariff reductions, easier market access and commitments to people mobility and government procurement (amongst others). This is a major win in the long-standing alliance of both these nations. The CETA was signed by the UK Secretary of State for Business, Mr Jonathan Reynolds, and India's Commerce and Industry Minister, Shri Piyush Goyal, in the presence of the Prime Minister of the UK, Sir Keir Starmer, and the Prime Minister of India, Shri Narendra Modi.
Significantly, legal services have specifically been excluded from the scope of the CETA, even though we are given to understand that there was a strong lobby in favour of its inclusion. This article attempts to deconstruct the CETA – setting out its features, inclusions, exclusions and the opportunities for Indian lawyers in this context.
Features and Benefits under the CETA
- 99% of India's Trade Routes to be Tariff-free - India's maximum Trade Routes (99%) will be free from tariffs. Most Indian products, including textiles, engineering products, gems and jewellery, maritime products, chemicals, leather and toys, will be duty-free when they enter the UK markets. India has simultaneously opened 89.55 of its tariff lines, which cover 91% of UK exports. The UK will only have instant duty-free market access for 24.5% of its exports. There are bilateral protections in place to handle any unexpected spikes in imports that could affect the home industries.
- Abridged rules of origin of goods - CETA eases the process by allowing exporters to self-certify the origin of goods, saving time and documentation. UK importers can also depend upon the importer's expertise for certification to ease trade. There is no need for complicated documents for smaller shipments weighing less than 1000 pounds; this helps promote small businesses and trade.
- The Double Contribution Convention (DCC) - is one of CETA's major innovations. It establishes a disciplined framework for professionals to relocate temporarily. The UK presently has unambiguous entry requirements for independent professionals, business travellers, and contractual service providers. For a maximum of three years, Indian employees and their employers are exempt from providing the UK social security contributions when on short-term projects. Over 900 businesses and about 75,000 employees are anticipated to benefit, ultimately leading to an estimated savings of over INR 4,000 crores.
- Cross-Sector Impact - The cross-sector impact is also covered by the FTA, especially with regard to supply chain resilience and employment. India's labour-intensive industries, including leather and textiles, are predicted to enjoy substantial job growth, while the UK's high-growth industries, such as manufacturing and clean energy, may help create job opportunities. In order to improve the supply chain resilience, the agreement aims to remove non-tariff obstacles that impede the free flow of goods and services.
Sector-wise impact of the CETA:
Indian exporters will now get duty-free access to important industries, including electronics, food processing, technical items, chemicals, pharmaceuticals, marine products, etc. This could increase competitiveness, lower compliance costs, and potentially speed up entry into the UK market. Below is a short, sector-wise impact analysis of the FTA.
- Agriculture - The agricultural sector holds a 10.1% share in the market, which shows its crucial presence in the trade composition of the country. The UK imports only USD 811 million from India, but its overall import is USD 37.52 billion, which shows that there is a large scope for growing high-quality agricultural items. CETA will enable Indian farmers to attain solid pricing for their items when it enters the UK market. Agricultural and processed food items are estimated to increase by over 50% in the coming three years because of the CETA. India could gain a strategic positioning in the world market in categories like fresh grapes, bakery goods, preserved fruits, vegetables and nuts, fresh vegetables, processed food items, sauces, and ready-to-make sauces. This is a tremendous opportunity for both agri and agri-tech companies, one that merits serious attention and strategic investment.
- Textiles- The FTA removes tariffs on textiles being imported from India, thus increasing our competitiveness. Prior to the FTA, India had tariff duty as a roadblock when compared to other countries like Bangladesh, Cambodia and Pakistan. With the removal of duties, items like house textiles, carpets, and handicrafts could receive enhanced impetus. The clothing houses of India (like Surat, Ludhiana, Bhadohi, and Tirupur) could potentially witness an immense increase in work opportunities and financial growth post the FTA. However, it is also important to remember that India faces intense competition from partner nations (for example, ASEAN and South Korea) in crucial industries because of their cost-effectiveness and development. It is crucial to elevate the quality of Indian goods and services to meet and match global standards, to effectively take advantage of all these allowances.
- Electronic items and Software - The UK's sophisticated manufacturing, beverage, automotive, and life sciences sectors all stand to benefit from lower tariffs and easier access to markets. The competitiveness of British automakers is likely to improve. Clean energy, optical goods, and electrical machinery are also heavily featured in the FTA. Elimination of duty on items such as smartphones, optical fibre cables, electronic items and electrical machines could substantially boost their exports to UK markets. In parallel, software, IT industries and services are expected to create ample job opportunities and tap into an enhanced market potential of 15-20% because of FTA.
- Medicine and Pharmaceuticals - India currently exports pharma products worth under USD 1 billion to the UK, whereas globally its exports are valued at about USD 23.31 billion. UK's pharmaceutical imports was around USD 30 billion, highlighting the huge scope for greater growth in this sector. With the removal of tariff provisions, pharma exports from India to the UK could receive a significant boost, potentially making India one of the largest exporters in this sector to the UK. Under the FTA, medical devices, X-ray machines, surgical equipment, and ECG machines are exempt from duty. It is entirely likely that with the right strategy, Indian med-tech companies can leverage these incentives to enhance their competitiveness and presence in the UK market.
Effects Of The FTA On The Legal Industry
The FTA is designed to increase trade relations between India and the UK. In this context, legal will be an important lever, whether one is advising a company seeking to access the other market, structing such cross- border transactions, opining on sticky issues or handling dispute resolution. We know that legal services has been specifically excluded from the scope of the FTA. Regardless however, the legal sector can expect both opportunities and threats, some of which are articulated below:
- Cross-border opportunities: The anticipated growth in bilateral trade, especially in sectors such as pharma, agriculture and electronics and clean energy, could create demand for corporate structuring, commercial contracting, joint- venture and financing agreements, and other sector-specific compliance advice. This presents a significant opportunity for law firms in both countries. The FTA may give domestic companies with existing foreign partnerships a competitive edge that pure-play local companies may not be able to provide.
- Immigration law advice: The allowance of temporary relocation opens up potential work opportunity for immigration lawyers and experts to opine and facilitate this process. This is particularly relevant given that the immigration advisory space, has, in many instances, been dominated by unregulated intermediaries lacking the necessary qualifications, leaving customers vulnerable to misinformation and malpractice.
- Increase in the standard of legal services – Greater knowledge exchange and collaborations between Indian law firms and foreign law firms could enhance the quality of legal services provided, introducing best practices from both jurisdictions and combine legal acumen to provide holistic legal solutions to clients in both disputes and cross-border transactions.
- Price sensitivity: Due to the price sensitive nature of the Indian markets, international businesses accustomed to superior pricing could face organisational difficulties. Adapting their price structures to suit the Indian market may require them to undertake significant organizational policy overhaul, including adjusting their overall commercial strategy.
- Threats to the Indian market: The Indian legal firms could face some work cannibalization, especially those firms that cannot adapt to higher standards of service provision. With AI fast changing transactional legal practice and increased competitiveness with foreign lawyers being part of transactions, fee -pressure could become a major concern. Clients are likely to seek lower-cost options for services like due diligence and contract drafting, leading to potential price undercutting to secure mandates. Poaching of local Indian talent with higher and more attractive salaries by foreign law firms could be another threat in the medium-term, which could destabilise domestic teams.
Conclusion
The signing of the India-UK FTA is expected to promote strong economic cooperation, thereby increasing India's participation and involvement globally. Importantly, reduction of barriers to entry under the FTA, creates a fertile environment for start-ups and young entrepreneurs, particularly those in the agri/agri-tech space, clean energy, pharma and digital services space. The real measure of success would lie in how both these countries translate the commitments made into real market access, regulatory clarity and sustainable growth. For lawyers, staying ahead would mean building and enhancing cross-jurisdictional expertise now. We must prepare for a future where collaboration, competence and innovation on par with global standards is a non-negotiable.
[This article is intended for informational purposes only and does not constitute legal advice. Please consult with qualified legal counsel for guidance on your specific situation.]
Author: Aastha Abhya, Founder and Managing Partner, Atreus Law Firm, Views are personal.