The Unfinished Business of the India-U.K. Trade Deal | Explained

After more than four years of on-again, off-again negotiations, the UK-India Comprehensive Economic and Trade Agreement (CETA) formally came into force on July 15, 2026 — hailed by both governments as a landmark achievement. But a detailed House of Lords committee review has flagged that significant pieces of the deal remain genuinely unresolved, leaving what the committee itself termed "unfinished business" even as the agreement takes effect.

A Long Road to Get Here

Negotiations for a UK free trade agreement with India were launched in 2022, following the two countries' 2021 commitment to work toward a comprehensive deal. Talks were repeatedly delayed and even paused for nearly a year due to general elections in both countries, with early ambitions to conclude by Diwali 2022 giving way to years of continued negotiation over disputed issues including visas for Indian workers and students, market access for British apples and cheese, and investment protections. The agreement was ultimately signed on July 24, 2025, and formally entered into force almost exactly a year later.

What the Deal Actually Delivers

Under CETA, 99% of Indian goods entering the UK and 90% of UK goods entering India will either be duty-free or see reduced tariffs. The UK government estimates the agreement will reduce tariffs on UK exports to India by up to £400 million a year initially, potentially rising to £900 million after 10 years, while total UK-India trade — worth £48 billion in 2025 — is projected to grow by an additional £25.5 billion annually, boosting Indian GDP by £5.1 billion and UK GDP by £4.8 billion per year. Commentators have noted an important asymmetry in how the tariff cuts are structured: Indian tariff reductions are phased in gradually over a number of years, while Indian exporters gain immediate access to many parts of the UK market.

The "Unfinished Business" the Lords Flagged

The House of Lords International Agreements Committee, in a report published February 3, 2026, specifically noted that the deal did not include a chapter on investment and lacks any standalone bilateral investment treaty. The committee said this gap has left shareholders concerned, meaning "enhanced investor protection remains an ambition rather than a secured outcome" — language the committee explicitly used to describe the issue as "unfinished business," calling on the government to push ahead with further negotiations in this specific area.

Why Investment Protection Matters

The absence of a bilateral investment treaty is a meaningful gap for a deal of this scale. Without dedicated investment protections, businesses on both sides lack some of the standard legal safeguards — such as clear dispute-resolution mechanisms and guarantees against discriminatory treatment — that typically accompany major trade agreements between economies of this size, potentially leaving investors more exposed to policy shifts or regulatory disputes than they would be under a more comprehensive framework.

How Parliament Weighed In

The Commons Business and Trade Committee separately described the FTA as "the UK's most economically significant bilateral free trade agreement since leaving the European Union," while cautioning that the agreement's potential would only be realized if it were implemented successfully. The deal was debated in the House of Commons on February 9, 2026, where Secretary of State for Business and Trade Chris Bryant discussed the agreement's anticipated economic benefits and the government's plans to support businesses in maximizing them, expressing hope the deal would enter into force by the end of summer — a target that was ultimately met.

Broader Context: India's Wider Trade Push

The UK deal is part of a broader wave of Indian trade diplomacy: the EU and India concluded their own landmark free trade agreement on January 27, 2026, after negotiations that began in 2007, stalled, and were only relaunched in 2022 — a deal European Commission President Ursula von der Leyen called the "mother of all deals," covering roughly 2 billion consumers and a quarter of global GDP. The near-simultaneous conclusion of both the EU and UK deals reflects India's accelerating effort to deepen trade ties with major Western economies.

Why the Gaps Still Matter

While CETA's tariff provisions are now live and already benefiting sectors including automotive, manufacturing, consumer goods, creative industries, and medical technology, the missing investment chapter means the deal's full economic potential — particularly around attracting and protecting cross-border investment — remains only partially realized. That distinction between what CETA delivers immediately (tariff reductions) versus what it still lacks (formal investment protections) is central to understanding why parliamentary committees continue describing parts of the relationship as unfinished, even after the agreement's formal implementation.

What's Next

With the House of Lords committee having explicitly called on the government to pursue further negotiations on investment protection, attention will likely turn to whether the UK and India open a dedicated follow-on track to address this gap — either through a standalone bilateral investment treaty or an expanded chapter within CETA itself. Until that happens, businesses on both sides will continue operating under the tariff benefits already in force, but without the more comprehensive investment safeguards that a deal of this scale would typically be expected to include.