India–UK CETA Can Unlock New Growth Opportunities for Indian Exports Across Manufacturing, Technology and Services: PHDCCI

New Delhi, July 15, 2026: As India-UK CETA takes effect, PHDCCI launches its PHDCCI Research: Strategic Business and Market Intelligence Series with India–UK CETA: A Strategic Guide to Export Opportunities and Market Access.
The PHDCCI report provides a comprehensive assessment of the India–UK Comprehensive Economic and Trade Agreement covering bilateral trade patterns, revealed comparative advantage, sectoral competitiveness, Rules of Origin, market access conditions, technology collaboration, consumer trends, trade indicators and policy recommendations aimed at maximising the benefits of the agreement for Indian industry.
The report indicates that the United Kingdom continues to remain one of India's most important export destinations. During FY2024-25, India's exports to the UK reached US$14.55 billion, generating a trade surplus of nearly US$6 billion. Although trade moderated in FY2025-26, the agreement is expected to provide renewed momentum by reducing market access barriers, improving customs procedures, and facilitating greater integration of bilateral value chains.
According to the report, India's export basket to the UK is increasingly shifting towards higher-value manufacturing products, supported by industrial policies, production-linked incentive (PLI) schemes, and improving global competitiveness. Smartphones, pharmaceuticals, aluminium oxide, petroleum products, engineering goods, machinery components, footwear and processed agricultural products are emerging as major drivers of export growth.
The study finds that India possesses a strong and rising comparative advantage in several export-oriented sectors. The country's competitiveness has strengthened significantly in smartphones, aluminium oxide (HS 281820), pharmaceuticals, jewellery, footwear and auto components, reflecting improvements in manufacturing capability, availability of raw materials, domestic value addition and supportive industrial policies.
The report also highlights that India's export structure complements the UK's import requirements. The Trade Complementarity Index has consistently remained above 63, indicating substantial scope for expanding bilateral trade under preferential tariff access. Likewise, the Trade Intensity Index has remained close to one, suggesting that actual trade flows are approaching their potential and could expand further following the implementation of CETA.
Among the fastest-growing export opportunities identified in the report are:
•    Smartphones and electronics supported by the Production Linked Incentive Scheme.
•    Pharmaceuticals and healthcare products backed by India's strong manufacturing ecosystem.
•    Aluminium oxide and specialty materials leveraging India's abundant bauxite reserves.
•    Engineering goods, machinery parts and automotive components.
•    Rice, processed food products and agricultural exports.
•    Gems, jewellery and precious metal products.
Beyond merchandise trade, the report underlines the growing importance of services exports. Digital delivery (Mode 1) continues to account for the majority of UK services imports from India, reinforcing India's competitive strength in information technology, professional services and knowledge-based industries.
The report also identifies significant opportunities for bilateral collaboration in advanced technologies. Through the UK–India Technology Security Initiative, both countries are strengthening cooperation in semiconductors, artificial intelligence, quantum technologies, telecommunications, biotechnology, critical minerals and advanced materials. These partnerships are expected to enhance innovation, strengthen resilient supply chains and promote greater investment in high-technology sectors.
The analysis further notes that the UK's innovation ecosystem, strong research capabilities and substantial investments in science and technology complement India's expanding manufacturing base, skilled workforce and growing domestic market. This combination provides a favourable environment for joint research, technology transfer and industrial collaboration.
However, the report emphasises that exporters must continue to address regulatory requirements relating to technical standards, sanitary and phytosanitary measures, product certification, hallmarking, pharmaceutical approvals, food safety regulations and Rules of Origin compliance in order to fully utilize preferential market access under CETA.
"The India–UK CETA has the potential to transform bilateral trade from a traditional goods-based relationship into a technology-driven strategic economic partnership. India's growing competitiveness in manufacturing, combined with the UK's strengths in innovation and advanced technologies, creates significant opportunities for expanding exports, attracting investment and integrating into global value chains said Rajeev Juneja, President, PHDCCI."
Key Highlights of the Report
•    India's exports to the UK reached US$14.55 billion in FY2024-25.
•    The UK accounted for around 3% of India's total exports, ranking among India's leading export destinations.
•    Smartphones have emerged as one of the fastest-growing export categories.
•    Aluminium oxide has become a rapidly expanding export product with strong comparative advantage.
•    India demonstrates strong export specialisation in pharmaceuticals, jewellery, footwear, petroleum products and auto components.
•    Trade Complementarity Index above 63 indicates strong potential for expanding bilateral trade.
•    Technology cooperation under the UK–India Technology Security Initiative covers AI, semiconductors, telecommunications, quantum technologies, biotechnology, advanced materials and critical minerals.
•    Simplified customs procedures and improved market access under CETA are expected to strengthen bilateral supply chains and enhance export competitiveness.
"The agreement provides an important platform for Indian industry to diversify export markets, increase value addition and strengthen competitiveness in high-growth sectors such as electronics, pharmaceuticals, engineering goods, speciality materials and digital services. Effective utilisation of the agreement will require greater awareness of Rules of Origin, regulatory standards and market-specific compliance requirements Dr. Ranjeet Mehta, SG and CEO, PHDCCI."