From spirits to automobiles: These stocks and sectors will be in focus as India-UK FTA comes into effect

The much awaited Comprehensive Economic and Trade Agreement (CETA) between India and the UK came into effect on July 15, 2026. Commerce Secretary Rajesh Agarwal said that deal aims to boost India-UK bilateral trade to $100 billion by 2030. Bilateral trade in goods and services currently stands at around $55-60 billion. Under the agreement, several key Indian export sectors, including textiles, leather and footwear, gems and jewellery, and plastics will gain duty-free access to the UK market from July 15.

IT stocks

After the implementation of the trade deal, key IT companies like TCS, Tech Mahindra, Wipro and Infosys will likely witness some cost savings. Under the agreement, Indian IT professionals who are on a temporary work visit to the UK are now exempted from social security contributions for five years, extended from three years previously. The exemption will help IT companies save costs and achieve better margins for UK-based projects.

Textile and garments

The textile & garments industry is likely to become a key beneficiary of the agreement. Under the new agreement, Indian textile and garment exports are exempted from all tariffs, as compared to 4-12% earlier. The move is a major boost to Indian textile players, who are focusing on diversifying their export market away from the US. It will also make Indian textile exports to the UK more competitive, in comparison to other textile exports from countries like Bangladesh, Vietnam, Thailand and China.

Automobiles and auto components

The automobile and auto components industry will witness a paradigm shift as India reduces import duties on fully built conventional vehicles from 110% to 10% in a phased manner. However, electric and hydrogen-powered passenger cars will get preferential access only from the sixth year.

Similarly, Indian automobile components will secure zero-duty access to the UK’s automobile market. This will benefit auto component categories like castings, forgings, wiring systems, automotive electronics, tyres, transmission components, etc. Similarly, many British-made automotive components will also secure zero-duty access in a phased manner.

Leather and footwear

The UK is among the top three export markets for leather and footwear products from India. However, the country faced tariffs in the range of 4% to 12%. After the implementation of CETA, the tariffs will get completely eliminated, making Indian leather and footwear makers more competitive.

Spirit and alcoholic beverages

The Indian spirit and alcoholic beverage industry is expected to get more competitive with India reducing the customs duty on Scotch whisky and other premium UK spirits from 150% to 75%, which will be further reduced to 40% in a phased manner, subject to a minimum import price.