India-UK Trade Deal: Exports Rise 8% as Imports Fall

India’s merchandise exports to the United Kingdom rose by around 8% year-on-year to $2.43 billion in August and September 2026, the first two full months after the India-UK free trade agreement came into force. During the same period, Indian imports of British goods fell by 16.8% to $1.36 billion, according to the latest trade data.

The figures offer an early indication of how trade between the two countries is evolving under the India-UK Comprehensive Economic and Trade Agreement (CETA), which became operational on July 15, 2026. The agreement aims to reduce trade barriers, improve market access and expand commercial opportunities for businesses in both economies.

While exports from India recorded growth across the two-month period, imports from the UK followed a more uneven pattern. Shipments from Britain rose sharply in August before declining significantly in September, partly because of lower imports of precious metals such as silver.

Trade officials and experts have cautioned against drawing firm conclusions from the initial figures. Businesses on both sides are still preparing to use the agreement’s provisions, and a more detailed assessment will require country-specific and commodity-level trade data.

India-UK trade after CETA: What the first two months show

India’s merchandise exports to the UK increased by approximately 8% year-on-year across August and September 2026, reaching a combined value of $2.43 billion. Imports from the UK, meanwhile, declined by 16.8% to $1.36 billion over the same two months.

The export performance suggests that Indian goods continued to find demand in the British market during the initial period following the agreement’s implementation. However, the figures alone do not establish how much of the growth resulted directly from lower tariffs under CETA, since trade flows can also be affected by demand, prices, product composition and other market conditions.

The import decline also requires careful interpretation. Although the combined value of British goods entering India was lower, monthly figures show that imports increased in August before falling sharply in September. The reported decline in precious-metal shipments was one factor behind that movement.

The agreement’s impact is likely to become clearer as more businesses adjust their sourcing, pricing and export strategies to the new trade arrangements. Companies may also need time to understand documentation requirements, rules of origin and the specific tariff benefits available for their products.

Monthly export figures show growth in August and September

India’s exports to the UK followed different growth rates in the first two months after CETA became operational. In July 2026, exports fell by approximately 4.2% year-on-year to $1.2 billion, compared with $1.25 billion in July 2025.

The trend changed in August, when Indian merchandise exports to Britain increased by more than 10% year-on-year to $1.26 billion. In September, exports rose by approximately 5.5% to $1.17 billion.

The August increase was particularly strong, making it an important month in the early assessment of bilateral trade after the agreement took effect. September also recorded year-on-year growth, although at a slower pace.

These monthly movements indicate that India’s exports maintained positive year-on-year growth in both August and September. Nevertheless, a sustained assessment of the agreement will require more than two months of data, particularly because businesses may take time to adjust to new tariff arrangements and expand their orders.

The July figures also illustrate why the timing of CETA’s implementation matters when analysing its performance. The agreement became operational on July 15, meaning July was only partially covered by the new arrangements. August and September therefore provide a clearer view of the first two complete months under the agreement.

Why did imports from the UK fall by nearly 17%?

India’s imports from the UK showed substantial month-to-month variation during the initial period following CETA’s implementation. In July 2026, imports of British merchandise rose by nearly 12% year-on-year to $639 million, compared with $571 million in July 2025.

Imports increased further in August, rising by more than 24% year-on-year to $733 million. However, the trend reversed in September, when imports dropped by approximately 40% to $630 million, compared with $1.05 billion in September 2025.

The sharp September decline was a major factor behind the lower combined import value for August and September. Trade experts have pointed to reduced imports of precious metals, including silver, as part of the explanation.

Because merchandise trade values can change significantly when high-value commodities fluctuate, the overall import figure does not necessarily indicate a broad-based decline in demand for British products. A fall in a small number of high-value categories can influence the aggregate even when other product groups perform differently.

A definitive explanation will require more detailed commodity-level data showing which products contributed most to the change. The available figures provide an overview of the direction of trade but do not establish how every sector performed or how much of the decline was connected to CETA.

The difference between the August increase and September fall also underlines the importance of examining longer periods before assessing the agreement’s overall impact. Monthly trade figures can be affected by the timing of individual shipments and changes in the composition of imports.

India-UK trade grew during the first half of 2026-27

Provisional trade data released by India’s Commerce Ministry on October 15, 2026, show that merchandise exports to the UK increased during the first half of the 2026-27 financial year.

India exported goods worth $7.32 billion to Britain between April and September 2026, compared with $6.83 billion during the corresponding period in 2025. This represented year-on-year growth of 7.22%.

Imports from the UK moved in the opposite direction over the six-month period. India’s merchandise imports from Britain declined by 1.6% to $4.06 billion in April-September 2026, compared with $4.13 billion in the first half of 2025-26.

The half-year figures offer a broader view of bilateral trade than the August-September comparison alone. They show that Indian exports to Britain were higher across the first six months of the financial year, while imports recorded a modest decline.

However, the April-September period includes months before CETA became operational. The figures therefore cannot be treated as a full assessment of the agreement’s effects. A more precise evaluation would compare product-level trade before and after implementation while accounting for other factors that influence imports and exports.

The data nevertheless provide a useful baseline for tracking how bilateral trade develops as businesses begin using the agreement’s tariff concessions and other provisions.

What CETA offers British exporters

The India-UK Comprehensive Economic and Trade Agreement is designed to improve market access for goods from both countries. For the UK, the agreement removes or reduces tariffs on 90% of tariff lines, covering approximately 92% of India’s goods imports from Britain, according to the supplied trade details.

One of the notable provisions concerns British whisky and gin. Under the agreement, tariffs on these products are reduced from 150% to 75% when the deal enters into force, with a further reduction to 40% after the applicable staging period.

The changes could improve the price competitiveness of British alcoholic beverages in the Indian market, although the extent of any increase in sales will depend on factors such as consumer demand, pricing decisions, distribution and the time taken for the tariff reductions to be reflected in retail prices.

British car manufacturers are also expected to benefit from improved access to India. Under a quota arrangement, tariffs on eligible vehicles can fall from as high as 110% to 10%, subject to the agreement’s terms.

The lower tariff could create opportunities for eligible British automotive exports by reducing the customs burden on qualifying vehicles. However, the quota structure means that the concession is not an unrestricted reduction applying to every imported car. Its practical impact will depend on the applicable eligibility conditions and how the quota is used.

These provisions form part of a broader effort to make bilateral trade more commercially attractive. By lowering selected import costs, the agreement may create opportunities for exporters to reach new customers and expand sales across the two markets.

Indian exporters receive zero-duty access for nearly 99% of exports

India is also expected to benefit significantly from the agreement. CETA provides zero-duty access for nearly 99% of Indian exports, covering almost 100% of the value of India’s goods trade with the UK, according to trade experts cited in the supplied material.

The concessions cover a range of products, including textiles, leather goods, marine products, gems and jewellery, toys, engineering goods, chemicals and automotive components. Many of these sectors rely on manufacturing, skilled labour and supply chains that serve international markets.

Lower tariffs can make Indian products more competitive by reducing the import duties paid when goods enter the British market. Depending on the product and commercial arrangements, exporters may use the savings to offer more competitive prices, protect profit margins or invest in expanding their overseas business.

Textile and leather manufacturers, for example, may gain opportunities to compete more effectively for orders from British buyers. Marine products, engineering goods and automotive components could also benefit from improved market access, subject to product-specific requirements and compliance with the agreement’s rules.

However, zero-duty access does not automatically guarantee higher exports. Businesses still need to meet applicable product standards, demonstrate eligibility for preferential tariffs and compete on quality, delivery times and price. Demand in the UK market will also influence how quickly exporters can convert tariff advantages into additional sales.

The potential benefits may therefore differ across industries. Companies already exporting to Britain may find it easier to use the new arrangements, while businesses entering the market for the first time may need to invest in distribution, compliance and customer development.

How rules of origin and services provisions could support trade

CETA extends beyond tariff reductions. The agreement also provides for simplified rules of origin, measures to support services trade and provisions relating to professional mobility.

Rules of origin determine whether a product qualifies for preferential tariff treatment under a trade agreement. Simplifying these requirements can help eligible businesses establish that their goods meet the conditions for reduced or eliminated duties. The practical benefits will depend on the specific rules applicable to each product and the ability of exporters to provide the required documentation.

The agreement’s services provisions are also important because India and the UK have commercial interests that extend beyond physical goods. Services trade can involve professional expertise, business support, technology-related work and other activities that do not necessarily require products to cross a border in the traditional sense.

Professional mobility provisions may support opportunities for eligible professionals to work across the two economies, subject to the agreement’s terms and relevant domestic rules. Such arrangements can help businesses access expertise and facilitate cross-border commercial relationships.

The agreement also includes a Double Contribution Convention. Under this arrangement, eligible workers and their employers are exempt from paying social security contributions in the other country under the applicable conditions.

Such provisions can be relevant to businesses and professionals operating across borders because employment-related costs and administrative requirements can influence decisions about international assignments. The specific benefits will depend on eligibility and the rules governing individual circumstances.

Together, these measures show that CETA is intended to address several aspects of bilateral economic engagement, rather than focusing exclusively on customs duties. Their impact will depend on how effectively businesses and professionals understand and use the provisions available to them.

Why the full impact of the India-UK trade deal will take time to emerge

Trade officials and experts have indicated that both economies are still working towards realising the full potential of CETA. The early figures provide an initial picture, but businesses on both sides may need time to adjust to the agreement and incorporate its benefits into their commercial decisions.

Exporters may need to review pricing, supply contracts, certification procedures and documentation to determine whether their products qualify for preferential treatment. Importers may also need to reassess sourcing decisions as tariff costs change for selected goods.

These adjustments do not necessarily happen immediately after an agreement takes effect. Companies may operate under existing contracts, maintain established supply arrangements or wait for clearer demand signals before increasing shipments.

For that reason, the first two complete months of data should be treated as an early indicator rather than conclusive evidence of the agreement’s long-term success. The rise in Indian exports is encouraging, but it does not establish that every increase was caused by tariff reductions. Similarly, the fall in imports from Britain should not automatically be interpreted as evidence that the agreement has failed to improve market access.

More detailed commodity-level data will be particularly important in distinguishing changes caused by shifts in high-value imports from wider trends across individual industries. Longer-term comparisons can also help show whether the early export gains are sustained and whether British goods become more competitive in India as the agreement’s provisions take effect.

What the trade figures mean for businesses in India and the UK

For Indian exporters, the agreement creates opportunities to strengthen their position in one of the world’s major consumer markets. Industries covered by zero-duty access may be able to approach British buyers with improved pricing options, provided they meet the relevant origin and product requirements.

For British exporters, reduced tariffs on selected goods, including whisky, gin and eligible cars, could improve access to India’s large market. The scale of the opportunity will depend on demand, quota conditions, pricing and the ability of businesses to reach customers.

For both countries, the early trade data suggest that bilateral commercial ties are developing during the initial period under CETA, although the performance of imports and exports has not been uniform. India’s exports recorded growth in August and September, while British imports into India were affected by a sharp September decline.

The next stage will be to determine whether the agreement translates into sustained trade growth across a wider range of products. Exporters, importers and policymakers will need to monitor both the aggregate figures and the performance of individual sectors to understand where the benefits are emerging.

Conclusion

India’s merchandise exports to the UK rose by around 8% to $2.43 billion in August and September 2026, while imports from Britain fell by 16.8% to $1.36 billion in the first two full months after CETA became operational on July 15.

The export increase is an encouraging early development, while the import decline reflects a more uneven pattern that included a sharp fall in precious-metal shipments in September. Half-year figures also show that India’s exports to Britain rose by 7.22% to $7.32 billion, while imports declined by 1.6% to $4.06 billion during April-September 2026.

With tariff concessions covering a wide range of Indian exports and selected British products, CETA could create new opportunities for businesses in both countries. However, the full economic impact will depend on how quickly traders use the agreement, how demand develops and whether early gains translate into sustained growth. More detailed product-level data and a longer period of observation will be needed to assess the deal’s overall performance.