MPs warn UK–India trade deal tariff gains are at risk without export support

Billions of pounds in potential tariff savings from the UK–India Comprehensive Economic and Trade Agreement (CETA) could be put at risk unless the Government rethinks plans to cut export support staff, MPs have warned.

In a report published by the Business and Trade Committee, MPs said deep reductions to trade support roles could undermine the effectiveness of the agreement, despite it being described as the largest bilateral trade deal struck since Brexit.

Tariff savings could rise sharply over the next decade

New analysis cited by the committee estimates initial tariff savings for UK exporters to India could total around £400 million a year, rising to as much as £3.2 billion annually within a decade as export volumes increase.

The Government expects the deal to lift UK GDP by £4.8 billion a year by 2040 and increase annual bilateral trade with India by £25.5 billion, a significant uplift on the £43 billion recorded in 2024.

Automotive exports are forecast to rise sharply, while spirits producers are also expected to benefit from major tariff reductions. The agreement also marks the UK’s first entry into India’s central government procurement market.

MPs highlight delivery risks for SMEs

MPs cautioned that the projected gains may not materialise if businesses are left without adequate support to navigate India’s complex administrative system and extensive non-tariff barriers.

The committee urged the Department for Business and Trade to take a more active role in implementation, including supporting firms to use the agreement, monitoring uptake, and intervening quickly where barriers emerge.

Concerns are heightened by plans to cut almost 40% of the UK trade staff who would otherwise be tasked with helping businesses expand exports to India. MPs said this created a serious delivery risk at the heart of the Government’s growth strategy.

Rt Hon Liam Byrne, chair of the Business and Trade Committee, said Parliament was being asked to approve a deal promising billions in tariff savings while the resources needed to make it work were being stripped away.

“This is the biggest free trade deal since Brexit, with the potential to deliver billions in tariff savings for UK exporters, boosting growth and creating new jobs,” he said. “But ratification is only the start. Ministers must now set out a clear plan, backed by real resources, to turn access on paper into exports in practice.”

Services, investment and safeguards remain under scrutiny

The committee also questioned whether the agreement goes far enough on services trade and access for skilled professionals, saying it remained sceptical about what would be delivered in practice.

With no bilateral investment treaty included, MPs called on ministers to develop a more ambitious vision for a future agreement to unlock further UK–India investment.

There were also warnings about potential downsides for sectors such as textiles and ceramics, which already face intense competition from Indian imports. MPs reiterated earlier concerns that, in the absence of binding human rights provisions in the deal, the Government must set clear and enforceable expectations to prevent UK businesses being undercut by labour abuses in overseas supply chains.

Industry figures advising the committee said the agreement could act as a catalyst for deeper collaboration if followed by further action. Pankaj S Kulkarni, head of banking, financial services and insurance at Tech Mahindra, told MPs that a bilateral investment framework would be a necessary next step to unlock additional UK–India investment, particularly in areas such as artificial intelligence.

Mohit Joshi, chief executive and managing director of Tech Mahindra, said the agreement had the potential to accelerate growth across both economies. He said India’s talent pool and engineering strength, combined with the UK’s research and innovation capabilities, created a platform for long-term collaboration and certainty for businesses operating in both markets.

What it means for businesses in the North East

For North East exporters and scaleups, the committee’s message is clear: the agreement may improve market access, but the practical work of exporting to India will still require strong implementation support.

That includes understanding how to apply the deal’s provisions, preparing for administrative requirements, and navigating non-tariff barriers that can slow down market entry.

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Outlook

The committee concluded that while the UK–India agreement sets a strong foundation, it should be treated as a starting point rather than a finished product.

Without sufficient staff, oversight and accountability, MPs warned, the deal’s promised economic benefits risk remaining theoretical rather than transformative.