India-UK free trade pact set to boost engineering exports by $3 billion

India’s engineering exports to the UK are set for a massive leap, thanks to the proposed Comprehensive Economic and Trade Agreement (CETA) between the two countries. The deal, which includes complete tariff elimination in key sectors, is expected to almost double India’s engineering exports to the UK — from the current $4.28 billion to over $7.5 billion by 2029-30.

The UK, which ranks as India’s sixth-largest engineering export market, witnessed a robust 11.7% growth in 2024-25 over the previous year. Yet, despite the UK importing $193.52 billion worth of engineering goods globally, India's share remains under 2.5%, indicating significant untapped potential.

Once CETA is implemented, tariffs as high as 18% will be eliminated, offering Indian exporters a level playing field in the UK market. Key engineering categories set to benefit include:

• Industrial and electrical machinery: Set to gain zero-duty access.
• Automotive products: Including conventional vehicles and components, will be duty-free; electric and hybrid vehicles will be allowed under tariff rate quotas.
• Non-ferrous base metals: Such as copper, aluminium, and zinc, will also enjoy zero-duty entry.
• Medical devices: Including surgical and diagnostic instruments, will see tariff elimination.
• Aerospace and defence: Fully liberalised for aircraft and defence product exports.
• Renewable energy equipment: Expected to benefit from tariff-free entry, aligning with India’s clean energy push.

Export growth in these categories is projected to range between 12-20% CAGR over the next five years, aligning with India’s broader engineering export target of $250 billion by 2030.

Industry experts say the UK’s tariff structure underlines a strategic push for deeper industrial cooperation and advanced supply chain integration with India, reinforcing the bilateral trade relationship in a post-Brexit environment.