India-UK trade pact to boost farm and auto exports

Experts say the India-UK Comprehensive Economic and Trade Agreement will improve market access for agricultural and processed food products, strengthen automotive exports through lower tariffs, encourage technology adoption and support investment, while enhancing India's competitiveness in the UK market

New Delhi: The India-UK trade pact is expected to enhance market access for a range of domestic agricultural and processed food products through duty-free or preferential tariff treatment and improve price competitiveness vis-a-vis suppliers from other countries in the British market, experts said.

The India-UK Comprehensive Economic and Trade Agreement (CETA), which came into force on July 15, is also set to boost automotive exports due to reduced tariffs, according to experts.

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They said that, for agriculture, the strongest opportunity lies in shifting export participation from commodity-led categories to value-added food products, as agri-food exports, including processed foods, stood at USD 49.43 billion in 2024-25 and accounted for around 11.2 per cent of India’s total exports.

“The India-UK CETA is expected to improve market access through duty-free or preferential tariff treatment for a range of agricultural and processed food products, improving India’s price competitiveness against non-FTA suppliers and supporting diversification beyond traditional export destinations,” Anand Ramanathan, Partner & Consumer Industry Leader, Deloitte South Asia, said.

He also said the pact is likely to accelerate technology adoption across export-oriented agriculture, FPO-linked supply chains and agritech suppliers because market access is increasingly tied to traceability, certification, quality assurance and reliable delivery rather than tariffs alone.

Annual post-harvest losses are estimated at around Rs 92,651 crore, with cold-chain gaps across pack houses, ripening chambers, refrigerated transport, irradiation units and farm-gate pre-cooling acting as key constraints.

He added that digital technologies can directly address these gaps by improving traceability, reducing losses, supporting compliance and improving export reliability.

“Blockchain and IoT-based systems are especially relevant because food-sector competitiveness is moving towards batch-level visibility, temperature monitoring, supplier transaction records, predictive maintenance and real-time supply-chain intelligence,” Ramanathan said.

Blockchain-enabled traceability platforms are being adopted to record batch movement, temperature exposure and supplier transactions.

On the impact of the pact on India’s auto sector, Gulzar Didwania, Partner and Indirect Tax and India Global Trade Advisory Leader at Deloitte India, said the CETA is expected to provide a significant boost to India’s automotive sector by improving export competitiveness while adopting a calibrated approach to import liberalisation.

On the export side, UK tariffs on Indian automobiles will be reduced from up to 18 per cent to nil, except for passenger vehicles, including electric and hybrid vehicles, which will be subject to Tariff Rate Quotas (TRQs).

Duties on auto components will be reduced from around 2-4 per cent to nil, enhancing the competitiveness of Indian manufacturers in the UK market, he said.

On the import side, Didwania said India has adopted a phased liberalisation strategy, reducing customs duties on eligible passenger vehicles from up to 110 per cent to 10 per cent over 15 years, subject to TRQs.

“This balanced framework is expected to encourage investment, technology transfer and deeper supply chain integration, while providing the domestic industry adequate time to enhance its competitiveness,” he added.

He also said that the Internal Combustion Engine (ICE) passenger car segment is expected to be the biggest beneficiary during the initial phase of the agreement.