Duty-Free Access Under India-UK FTA Expected to Boost Foreign Investment in India

 

Duty-Free Access Under India-UK FTA Expected to Boost Foreign Investment in India

The India-UK Comprehensive Economic and Trade Agreement (CETA), officially signed on July 24, 2025, is poised to significantly enhance foreign direct investment (FDI) inflows into India. One of the key provisions driving this trend is the duty-free access to the UK market for Indian-manufactured goods.

The agreement features a dedicated chapter on ‘Rules of Origin’, outlining clear criteria for which products qualify for the reduced or zero tariffs. To benefit from these preferential tariffs, products must meet the local sourcing requirements, meaning they must be manufactured or substantially processed within India.

Trade experts and investment analysts believe this requirement will encourage global and domestic companies to expand their manufacturing operations in India, in order to access the UK market under favorable trade conditions. This is expected to result in a significant boost to Make in India initiatives, job creation, and enhanced supply chain development.

Industry stakeholders view the CETA as a strategic milestone in India's trade diplomacy. By offering predictable market access and ensuring regulatory transparency, the agreement strengthens investor confidence and sets the stage for long-term economic cooperation between India and the UK.

As India continues to sign bilateral agreements focused on economic integration, the India-UK FTA stands out for its emphasis on manufacturing incentives and investment facilitation.