The India-UK Comprehensive Economic and Trade Agreement has significantly expanded bilateral trade by reducing tariffs and improving market access, but crucial issues including investment protection, pharmaceutical patents, and carbon border taxes remain outside the agreement.

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• The India-UK Comprehensive Economic and Trade Agreement (CETA) came into force on 15 July 2026, eliminating tariffs on 99 percent of Indian exports while easing mobility provisions for professionals and strengthening bilateral trade.
• Despite its broad scope, the agreement does not include a Bilateral Investment Treaty, leaving investment protection and investor-state dispute settlement mechanisms to be negotiated separately in future discussions.
• India retained its existing patent laws, including Section 3(d) of the Patents Act, 1970, rejecting demands for stronger intellectual property protection that could have extended pharmaceutical patent monopolies.
• By retaining its patent framework, India continues to support the production of affordable generic medicines, ensuring that domestic pharmaceutical manufacturers remain competitive in both domestic and international markets.
• The agreement also excludes the United Kingdom’s Carbon Border Adjustment Mechanism, which is scheduled to take effect from 1 January 2027 and will impose carbon-based charges on imports of products such as steel, aluminium, and cement.
• Indian exporters of carbon-intensive products may face additional costs under the carbon border mechanism, potentially reducing some of the tariff benefits secured through the new trade agreement.
• Trade experts believe future negotiations will focus on investment protection, dispute resolution mechanisms, climate-related trade measures, and regulatory cooperation to further strengthen economic relations.
• The agreement represents a major milestone in India-UK economic ties while leaving several complex issues for subsequent negotiations as both countries deepen their long-term strategic and commercial partnership.