India-UK Trade Pact To Eliminate Tariffs On Auto Components From July 15

India and the United Kingdom will bring into force the Comprehensive Economic and Trade Agreement (CETA) on July 15, 2026, marking a significant milestone in bilateral economic relations and creating new opportunities for Indian exporters, service providers and professionals.

The agreement, concluded after 14 rounds of negotiations, is designed to expand trade and investment flows between the two countries through tariff reductions, broader market access for services, and provisions to facilitate professional mobility. Alongside CETA, the Agreement on Social Security, also known as the Double Contribution Convention (DCC), will also take effect from the same date.

Tariff-Free Access for Auto Components
For the automotive sector, one of the key provisions is the elimination of UK tariffs on Indian engineering goods and auto components. Tariffs of up to 18 per cent on these products will be reduced to zero, improving the competitiveness of Indian component manufacturers in the UK market and potentially strengthening their participation in global automotive supply chains.

India's auto component industry has steadily expanded its export footprint in recent years, with manufacturers increasingly supplying parts to global vehicle makers and Tier-1 suppliers. The removal of tariff barriers could provide an additional boost to exports to the UK and support efforts to diversify overseas markets.

Services and Engineering Mobility Provisions
Beyond goods trade, the agreement includes commitments across 137 services sub-sectors and establishes mobility pathways for business visitors, intra-corporate transferees, contractual service suppliers, independent professionals and investors. These provisions could benefit Indian engineering and technology professionals working with UK-based automotive companies on areas such as vehicle development, software, connected-car technologies and mobility solutions.

Five-Year Social Security Exemption
The accompanying social security agreement is expected to support cross-border collaboration further. Under the arrangement, Indian professionals and their employers on temporary assignments in the UK will be exempt from making dual social security contributions. The exemption period has been extended from three years to five years.

According to the government, more than 75,000 Indian professionals and over 900 companies are expected to benefit from the revised framework. For automotive manufacturers, engineering service providers and component suppliers with employees deployed overseas, the extended exemption period could help lower assignment-related costs and improve workforce mobility.

With the agreement set to become operational next month, Indian automotive suppliers and engineering firms are expected to assess the opportunities arising from improved market access and a more streamlined framework for professional movement between the two countries.