The trade deal proposed between the UK and India in 2025 has now come into effect.
Worth an estimated £4.8 billion, the deal is set to immediately boost the economy and provide easier access to British and Indian products and services across both countries.
In a recent press release, Harjinder Kang, His Majesty’s Trade Commissioner for South Asia and British Deputy High Commissioner for Western India, said: “Our landmark trade deal is designed to benefit businesses and consumers from day one with cheaper, quicker and easier trade. We are all excited to take full advantage of it.”
Business owners must start acting so that they can be at the forefront of this monumental trade deal.
What is the trade deal?
The UK-India trade deal, officially known as the Comprehensive Economic and Trade Agreement (CETA), is a free trade agreement designed to make it easier, cheaper and quicker for businesses in both countries to trade with each other.
It came into force on 15 July 2026 and is expected to strengthen an already significant trading relationship worth £48 billion in 2025.
The deal reduces trade barriers by cutting tariffs on most goods moving between the UK and India.
Around 99 per cent of Indian exports to the UK will benefit from duty-free access, while 90 per cent of UK goods exported to India will see tariffs reduced or removed.
This opens up opportunities across sectors including manufacturing, automotive, food and drink, healthcare, technology and the creative industries.
The agreement goes beyond tariffs. It also introduces simpler customs processes, supports digital trade through paperless systems and gives businesses greater certainty when operating in each market.
UK firms will gain improved access to India’s government procurement market, while both countries have agreed measures to support professional mobility and make exporting easier for SMEs.
In the long term, the government expects the deal to increase UK-India trade by £25.5 billion a year, helping businesses expand into new markets and creating fresh opportunities for growth on both sides.
How will the trade deal benefit UK SMEs?
For SMEs, one of the biggest advantages of the UK-India trade deal is that it removes many of the barriers that can make exporting feel complex and expensive.
The agreement includes a dedicated SME chapter, designed to help smaller businesses understand how to trade between the two markets and access clear, reliable information online.
Lower tariffs mean UK SMEs can sell products into India more competitively, while simplified customs procedures should reduce the time and administrative burden involved in moving goods across borders.
Both countries have also committed to making trade processes more transparent and more straightforward, helping smaller businesses that may not have dedicated export teams or specialist knowledge.
The deal also supports faster customs clearance, with both countries aiming to release goods as quickly as possible and prioritising perishable products.
New digital trade provisions, including support for electronic contracts and paperless trade, are expected to streamline cross-border transactions and reduce paperwork.
For service-based SMEs, the agreement creates new opportunities in sectors such as technology, financial services and professional services by improving market access and providing greater certainty when operating in India.
The trade deal gives smaller businesses more tools, clearer guidance and better access to one of the world’s fastest-growing major economies.
What SMEs need to do now the trade deal has started
With the trade deal now in force, SMEs should review whether their products or services could benefit from lower tariffs and easier access to the Indian market.
Businesses can also explore new export opportunities, update their growth plans and check they’re registered to access any available trade benefits.
One of the most important steps for SMEs is to check if this business expansion will fit into their year-by-year tax plan.
Here at Reanda, our team are here to ensure that your global operations fit within your tax plan and are tax efficient.
Get in touch today to learn how the UK-India trade deal can positively impact your SME.