UK–India Trade Deal Comes into Force; Karnataka Poised to Be a Major Beneficiary
•CETA opens the UK market to 99% of Indian exports, unlocking new opportunities in trade, investment, education, and connectivity
Mangaluru: The momentum generated by the landmark Comprehensive Economic and Trade Agreement (CETA) between the United Kingdom and India reached Coastal Karnataka as Chandru Iyer, British Deputy High Commissioner for Karnataka and His Majesty’s Deputy Trade Commissioner (Investment) for South Asia, visited Mangaluru and Manipal to highlight the agreement’s benefits and growing UK–Karnataka collaboration.
The visit focused on the far-reaching benefits of CETA, which came into force on July 15, 2026, as well as expanding partnerships in trade, education, investment, connectivity, and healthcare innovation across Karnataka.
Speaking at a press conference in Mangaluru, Chandru Iyer said Karnataka is expected to be among the biggest beneficiaries of the trade agreement, given its strong presence in agriculture, information technology, aerospace, manufacturing, education, and healthcare.
During his visit, Iyer was the chief guest at the fourth edition of the UK–India HealthTech Accelerator Programme, hosted by the Manipal Academy of Higher Education (MAHE) in partnership with the UK Government. Held from July 22 to 24 at the MAHE campus in Manipal, the three-day programme brought together HealthTech startups, innovators, policymakers, healthcare professionals, investors, and industry leaders from India and the United Kingdom to promote collaboration, innovation, and knowledge exchange in healthcare technology.
Following a nationwide competitive selection process, 25 high-potential HealthTech startups from across India were chosen to participate in the accelerator programme. At the conclusion of the programme, six companies will be selected for a fully funded immersion visit to the United Kingdom, where they will gain exposure to the UK’s healthcare ecosystem and engage with industry leaders, healthcare providers, investors, and innovation partners.
Earlier, on July 15, Dona Ghosh, Joint Director General of Foreign Trade, Sucheta Sreejesh, Commissioner of Customs, and British Deputy High Commissioner Chandru Iyer flagged off the first export consignment benefiting from CETA at the Inland Container Depot (ICD), Whitefield, Bengaluru. The shipment included Jindal aluminium products and other electronic goods.
Landmark Trade Agreement
The UK–India CETA is the UK’s most significant bilateral trade agreement since its exit from the European Union and India’s most comprehensive trade pact with a G7 nation.
To commemorate the agreement’s entry into force, the British Deputy High Commission in Bengaluru and the Government of Karnataka jointly hosted a reception on July 15, bringing together industry leaders, investors, and trade bodies from across the State.
Bilateral trade between the UK and India is already valued at £48 billion annually, having grown by more than £4 billion in 2025 compared to the previous year, even before the agreement came into force. In the long term, CETA is projected to increase bilateral trade by £25.5 billion annually, contributing £5.1 billion to India’s GDP and £4.8 billion to the UK’s GDP each year.
Under the agreement, 99% of Indian exports to the UK now enjoy duty-free access, while 90% of UK exports to India benefit from zero or reduced tariffs.
Tariff reductions cover a wide range of sectors, including aerospace, automotive, electrical machinery, pharmaceuticals, and medical devices. Aerospace tariffs have been reduced from up to 11% to zero, automotive tariffs from as high as 110% to 10% under a quota system, while tariffs on most electrical machinery have either been eliminated or substantially reduced.
The agreement also simplifies customs procedures, enabling faster clearance of goods—potentially within 48 hours when all documentation requirements are met. Perishable goods will receive priority treatment, and customs processes will be more accessible through digital platforms.
India has also emerged as a major investor in the UK. During 2025–26, India ranked as the UK’s second-largest source of investment projects for the seventh consecutive year, with 93 projects generating 12,687 new jobs.
Karnataka to Gain Significantly
Karnataka’s export profile closely aligns with sectors covered under CETA, making the State one of the biggest beneficiaries.
Duty-free access to the UK market is expected to boost exports of oilseeds, spices—including pepper, cardamom, and the Byadagi and Devanoor chilli varieties—millets, vegetables, fruits, flowers, coconut, mango, lime, sunflower, jasmine, and marigold.
Coffee growers in Chikkamagaluru are expected to benefit from improved market access, while fisheries in Dakshina Kannada and food-processing hubs in Bidar, Hassan, and Bengaluru Urban are also likely to witness increased export opportunities.
The agreement is also expected to strengthen Bengaluru’s IT sector through enhanced cross-border trade in services and attract more UK investment in Global Capability Centres across Bengaluru, Mysuru, and other districts.
Reduced tariffs on aircraft parts and engines are expected to benefit Karnataka’s aerospace and automotive industries in Bengaluru and Belagavi, while Mysuru Silk is poised to gain greater international visibility and export opportunities.
Since the signing of CETA, several major UK companies—including ARM, NatWest, Graphcore, and Rolls-Royce—have expanded their operations in Karnataka. Companies such as Applied Computing and DSP have also strengthened their presence in the State. Meanwhile, HSBC is planning a significant expansion of its operations in India.
Educational collaboration is also growing rapidly. Universities including Liverpool, Lancaster, Birkbeck, and Imperial College London have announced plans to establish a presence in Karnataka, while British schools such as King’s Canterbury and RGS Guildford are expected to commence operations in the State.
Air connectivity has also improved substantially, with 34 direct flights each week now operating between Bengaluru and London—a fivefold increase compared to the period before the trade agreement.
Alongside CETA, the Double Contribution Convention has come into effect, extending social security exemptions for Indian professionals working in the UK for up to five years. The agreement also introduces 1,800 annual visa slots for chefs, yoga instructors, and classical musicians, offering fresh opportunities for skilled professionals from Karnataka.
“This is the UK’s most significant trade agreement since leaving the European Union, and Karnataka is where its impact will be felt first. British businesses are already expanding here, our universities are opening campuses here, and we now have five times more flights connecting Bengaluru and London than before this deal. This partnership runs in both directions, and it is only getting closer,” said Chandru Iyer, British Deputy High Commissioner, Bengaluru.
