Can the India-UK trade deal take businesses to a new high?

Hello readers! 

The Comprehensive Economic and Trade Agreement (CETA) between India and the UK was signed on July 24, 2025, and the buzz it has caused is clear. This historic deal, which covers everything from cars and textiles to whisky and IT services, is sure to open up new business opportunities.

But the real question is: will businesses get involved, or will they play it safe?

Why is this deal so important?

It's like a reset button for trade between India and the UK. India can now send 99% of its goods to the UK without paying tariffs, and 85% of UK goods can enter India without paying duties. The two governments think this will add GBP 25.5 billion to trade between them each year (it is currently GBP 45 billion).

This is a big change for India, which has always been protectionist. Tariffs have gone down from an average of 15% to only 3%. This shows that people believe that "Make in India" products can compete on the world stage. It's a big deal for the UK after Brexit because London thinks its exports to India could go up by 60%.

Who's winning big?

Luxury Cars Get Cheaper, But No Free Ride. The UK has lowered tariffs on completely built-up (CBU) cars from 100% to 10%, but they are still subject to a tariff rate quota (TRQ) system. This means that only a small number of expensive cars, like Rolls-Royce, Bentley, and Aston Martin, will get this benefit.

This deal doesn't include smaller UK cars that cost less than $40,000, which protects UK carmakers like Tata and Mahindra. People who buy luxury cars might be happy, but will this change the Indian auto market as a whole? Not really.

Textiles finally have a fair playing field

Indian textiles and clothes can now enter the UK market without paying any taxes. This puts them on the same level as clothes and textiles from Bangladesh and Vietnam. Texprocil says that exports could go from $1.4 billion to $3 billion in three years. This is big news for job creation in an industry that needs a lot of workers.

IT and services get a push

IT is a must-have for any trade deal with India. This is good news for IT companies like Infosys, Wipro, and TCS because it makes it easier to get visas, set up social security, and get into UK markets. Also, it is easier for architects, engineers, chefs, yoga instructors, and even musicians to work in the UK.

The other side

Every deal, of course, has its bad side. Will UK imports hurt businesses in the UK? Maybe. For example, cosmetics will cost less because the taxes on perfumes will be cut in half and the taxes on soaps and face creams will be removed.

This will make it harder for Indian FMCG brands to compete, but companies like Hindustan Unilever, which have global portfolios, could see this as a chance.

The government now lets UK companies that meet a 20% domestic sourcing threshold bid on contracts. This could make Indian companies think about their prices and quality again.

What comes next?

On paper, the CETA deal is a big deal, but it will only work if it is carried out. States in India still have control over important rules, and companies may not make as much money as they could if the benefits don't trickle down.

There is also a bigger political side to this. The UK deal might push the EU to finish its trade deal with India, especially since the EU has already invested €140 billion through 6,000 companies. Without this, EU companies could fall behind in the world's fastest-growing major economy.

Why this is important

India only makes up 2% of the UK's trade right now (compared to 11% with China), so this is a chance for it to grow. Yes, lower duties make competition tougher, but they also force Indian businesses to be more efficient, creative, and global.

In short, the India-UK trade deal isn't just another government announcement; it's a chance for businesses to make money. In the next few years, trade between the two countries could change in ways that affect whisky makers in Scotland, jewellery exporters in Surat, and IT giants in Bengaluru.

📅  Coming up next week!

1. Corporate Earnings in Focus

The June quarter (Q1 FY26) earnings season will gather momentum, with heavyweight companies like Bharat Electronics, Larsen & Toubro, NTPC, Asian Paints, InterGlobe Aviation, Tata Steel, Hyundai Motor India, Hindustan Unilever, Maruti Suzuki, Mahindra & Mahindra, Sun Pharma, and ITC set to release their results.

Each day brings new updates—

• Monday, July 28: Bharat Electronics, Adani Green Energy, Cartrade Tech, GAIL, IndusInd Bank, NTPC Green Energy, Torrent Pharma, and Piramal Pharma.
• Tuesday, July 29: Larsen & Toubro, NTPC, Asian Paints, Piramal Enterprises, Bank of India, Blue Dart, GMR Airports, Happiest Minds.
• Wednesday, July 30: InterGlobe Aviation, Tata Steel, Hyundai Motor, Power Grid, Indus Towers.
• Thursday, July 31: Hindustan Unilever, Maruti Suzuki, M&M, Sun Pharma, Swiggy, Coal India, Dabur, and others.
• Friday, August 1: ITC, Godrej Properties, LIC Housing Finance, Tata Power, UPL, and Adani Power.

2. IPO Rush and Listings

The primary market is buzzing with action. At least five IPOs will open for subscription, including Aditya Infotech, Laxmi India Finance, NSDL, M&B Engineering, and Sri Lotus Developers.

• Listings this week: Indiqube Spaces, GNG Electronics, Brigade Hotel Ventures, and Shanti Gold International will make their debut on the exchanges.

3. Central Bank Decisions

Global monetary policy will take centre stage:

• The US Federal Reserve will announce its interest rate decision on July 30, with expectations of rates staying unchanged.
• The Bank of Canada will follow on the same day.
• The Bank of Japan will reveal its policy stance on July 31, after keeping rates steady in June.

4. Economic Indicators to Watch

• US Data: Advance Q2 GDP estimates, non-farm payrolls, unemployment data, and the core price index will shape global market sentiment.
• Euro Area Flash GDP: Expected on July 30, offering a snapshot of economic growth.
• India: Industrial production (June data), fiscal deficit for April-June, and bank loan growth data (as of July 18) will be released.
• China: July manufacturing PMI numbers will be key for global demand cues.

5. Auto Sales & US Tariffs

Automobile companies will release July wholesale dispatch numbers on August 1, an important indicator of consumer demand. Meanwhile, US reciprocal tariffs will take effect from August 1, potentially stirring global trade sentiment.

🎥 Prime Wealth Finserv In Media

Chakrivardhan Kuppala, Cofounder & Executive Director, wrote for Moneycontrol:

Staying invested works, but drawdowns deserve your respect too

We hope you liked it as much as we did while writing it .

Thank you