Archive · 27 Jul 2026
War Disruptions Slow India-UK FTA Progress
The India-UK Comprehensive Economic and Trade Agreement (CETA) started on July 15, aiming to boost trade between the two countries.
However, the war in West Asia has caused problems like higher shipping costs and longer travel times for goods.
This has made it harder for some Indian exporters, especially in sectors like engineering and leather.
Despite these challenges, some exporters, particularly in apparel and gems & jewellery, are optimistic and see new opportunities due to reduced duties and easier rules.
Overall, while there are difficulties, many believe the UK market has long-term potential.
The India-UK CETA came into force on July 15, aiming to boost trade.
War in West Asia has increased freight costs and extended journey times.
Engineering and leather sectors face significant challenges due to high costs and quotas.
Apparel and gems & jewellery sectors see increased interest and potential growth.
Some exporters remain optimistic about the UK market’s long-term potential.
- Who
- Indian exporters and UK buyers
- What
- India-UK Comprehensive Economic and Trade Agreement (CETA)
- When
- CETA came into force on July 15
- Where
- India and the UK
- Why
- To boost trade between India and the UK, but faced with challenges due to the West Asia war and subdued consumer demand in the UK
Optimistic Exporters
Pessimistic Exporters
Market Potential
Optimistic Exporters
Exporters remain optimistic about the UK market’s long-term potential and have started new initiatives to circumvent difficulties.
Pessimistic Exporters
Some exporters express concerns over subdued consumer demand in the UK, limiting short-term opportunities.
Sector-Specific Challenges
Optimistic Exporters
Apparel and gems & jewellery sectors see increased interest and potential growth due to duty cuts and easier compliance mechanisms.
Pessimistic Exporters
Engineering and leather sectors face significant challenges due to high freight costs, quotas, and lack of competitiveness.
- Date CETA Came into Force
- July 15
- Cost of 40-foot Container (Mumbai to Felixstowe)
- $7,200 (up from $1,800 pre-war)
- Increased Journey Time
- 14-21 days through the Cape of Good Hope
- Apparel Exports to UK
- $1.4 billion (potential to double in 2-3 years)
- Gems and Jewellery Exports to UK
- $754 million (expected to reach $2.5 billion post-zero duties)
- UK Tariffs on Indian Exports
- Reduced from 4.5%-5% to zero
- Non-Leather Footwear Tariffs
- Reduced from 11.9%-16% to zero
