Key Takeaways
- The Comprehensive Economic and Trade Agreement (CETA) between the United Kingdom and India, effective 15 July 2025, grants 99 % of Indian products zero or minimal import duties in the U.K. and offers reciprocal benefits for U.K. goods in India.
- Karnataka’s diverse export basket—including marine products, spices, millets, coffee, flowers, aerospace components, and IT services—stands to gain significantly from duty‑free access to the U.K. market.
- Bilateral India‑U.K. trade already exceeds £48 billion annually and grew by over £4 billion in 2025; CETA is projected to add another £25.5 billion a year, boosting India’s GDP by £5.1 billion and the U.K.’s by £4.8 billion.
- Registration on the Directorate General of Foreign Trade (DGFT) portal is required for Karnataka firms to avail CETA’s preferential tariffs.
- Beyond goods, the agreement encourages U.K. investment in Karnataka’s Global Capability Centres, aerospace, auto, and education sectors, with several U.K. multinationals already expanding their footprint in the state.
Press Conference Overview
Chandru K. Iyer, the British Deputy High Commissioner to Karnataka, addressed reporters in Mangaluru on Friday, outlining the opportunities created by the recently‑implemented Comprehensive Economic and Trade Agreement (CETA) between the United Kingdom and India. He emphasized that the agreement, which entered into force on 15 July 2025, opens a wide avenue for Karnataka’s producers, manufacturers, and service providers to tap into the U.K. market. Iyer’s remarks were accompanied by a brief presentation of trade statistics and sector‑specific benefits, aiming to sensitize local stakeholders to the practical steps needed to leverage the deal.
Tariff Benefits Under CETA
Under CETA, 99 % of Indian products enjoy zero or minimal import duties when entering the United Kingdom, while approximately 90 % of U.K. goods receive comparable treatment in India. This near‑total tariff elimination creates a preferential trading environment that reduces costs for exporters and improves price competitiveness. Iyer highlighted that such duty‑free access is not automatic; businesses must first register on the Directorate General of Foreign Trade (DGFT) portal to certify eligibility and claim the benefits. The streamlined process is intended to encourage widespread participation, especially among small‑ and medium‑sized enterprises that may otherwise face barriers to international trade.
Current Trade Trajectory and Future Projections
India‑U.K. bilateral trade already stood at £48 billion per annum, having risen by more than £4 billion in 2025 compared with the previous year—growth that occurred even before CETA’s implementation. Looking ahead, the Deputy High Commissioner projected that the agreement would add an additional £25.5 billion to annual trade flows. This increment is expected to contribute roughly £5.1 billion to India’s gross domestic product and £4.8 billion to the U.K.’s GDP, underscoring the macro‑economic significance of the deal for both nations.
Agricultural and Horticultural Gains
CETA’s duty‑free provisions are poised to benefit a range of Karnataka’s agricultural products. Oilseeds, spices such as pepper and cardamom, and specialty chilies—including the Byadagi and Devanoor varieties—will face lower barriers in the U.K. market. Millets, vegetables, and fruits like coconut, mango, lime, sunflower, jasmine, and marigold are also earmarked for expanded exports. Coffee growers, a key segment of the state’s agrarian economy, will gain tariff‑free access, while fisheries from Dakshina Kannada should see enhanced competitiveness due to the elimination of duties on fish and related products. Agri‑ and food‑processing clusters in Bidar, Hassan, and Bengaluru Urban are anticipated to experience further growth as a result of these opportunities.
Industrial and Manufacturing Advantages
The manufacturing sector stands to gain from CETA’s provisions on industrial goods. Reduced tariffs on aircraft parts and engines will bolster Karnataka’s aerospace and automotive industries, particularly in hubs such as Belagavi, Bengaluru, and Mysuru. Additionally, the state’s renowned silk producers in Bengaluru and Mysuru could benefit from greater international exposure and easier access to U.K. consumers, potentially increasing demand for high‑value textiles. Iyer noted that these advantages are complementary to existing strengths in Karnataka’s industrial base, positioning the state to attract more foreign direct investment and technology transfer.
Services and IT Sector Opportunities
CETA includes Mode 1 commitments for cross‑border trade in services, which directly benefit Karnataka’s information‑technology and business‑process outsourcing firms. By enabling Indian service providers to deliver services to U.K. clients without establishing a physical presence, the agreement facilitates smoother collaboration and expands market reach. Furthermore, districts across the state—including Bengaluru and Mysuru—are likely to see heightened interest from U.K. companies looking to set up Global Capability Centres (GCCs). Such centres would not only create skilled jobs but also foster knowledge exchange and innovation ecosystems.
Education and Academic Collaboration
Highlighting the education dimension, Iyer urged U.K.-based universities to consider establishing campuses or partnerships in Dakshina Kannada and Udupi, regions recognized as Karnataka’s education hubs. He argued that the coastal districts’ strong academic infrastructure, combined with CETA’s facilitative framework, makes them attractive destinations for British higher‑education institutions seeking a foothold in India. Expanded academic collaboration could lead to joint research programmes, student exchanges, and capacity‑building initiatives that benefit both economies.
Corporate Expansion Already Underway
Since CETA’s signing, several prominent U.K. corporations have already expanded their operations in Karnataka. Notable examples include Arm, NatWest, Graphcore, Rolls‑Royce, Applied Computing, and DSP, which have increased their local presence through new offices, research facilities, or partnerships. HSBC, the United Kingdom’s leading multinational bank, is also evaluating a rapid expansion into India, signaling confidence in the market outlook shaped by the trade agreement. These developments serve as early indicators of the broader investment climate that CETA is expected to nurture.
Conclusion and Call to Action
Chandru K. Iyer closed his press briefing by reiterating that the full advantages of CETA can only be realized if stakeholders actively engage with the available mechanisms—particularly the DGFT registration process—and align their export strategies with the agreement’s provisions. He encouraged farmers, manufacturers, service providers, and academic institutions to explore the opportunities outlined, emphasizing that proactive participation will not only boost Karnataka’s economic profile but also strengthen the enduring India‑U.K. partnership. The Deputy High Commissioner’s remarks underscored a shared optimism that the trade pact will deliver tangible, measurable benefits for the state’s diverse economic landscape.