Scotland-India Strategic Market Insight Report
The Scotland-India Strategic Market Insight Report provides an independent, evidence-based assessment of the Indian market, identifying where Scotland's key sectors, capabilities and export strengths align with India's current and future demand.
2. CETA: Changing the commercial equation
CETA gives Scottish firms a stronger route into this established corridor. By 2040, the agreement is projected to add £25.5 billion to UK-India bilateral trade, which is an estimated increase of 38.8%.[19] UK exports to India are expected to rise by £15.7 billion, or 59.4%, while UK imports from India increase by £9.8 billion, or 25%. The projected benefit to UK gross domestic product is £4.8 billion a year, with real wages rising by £2.2 billion. These gains are important, but the most immediate value for Scottish businesses lies in the change to market access.
CETA provides two-way tariff liberalisation. India will reduce tariffs on UK products including spirits, automotive products, electrical machinery and aerospace. These commitments are directly relevant to Scottish exporters. The UK will also remove tariffs across a broad range of Indian goods entering the UK, supporting wider two-way trade and supply-chain links.
| UK product category | Tariff before CETA | India’s commitment under CETA |
|---|---|---|
| Spirits, including Scotch whisky | 150% | 75% immediately, then 40% over 10 years |
| Automotive products | 110% | 10% under quota |
| Electrical machinery | 22% | Reduced to 0% for relevant products, or reduced by 50% depending on the product |
| Aerospace | 11% | Reduced to 0% |
Across UK goods, the weighted average tariff is expected to fall from 15% to 3%. These changes make established Scottish strengths more competitive and improve the economics of testing new products in India.
The agreement also opens routes that are less visible than tariff reductions. UK firms gain access to around 40,000 Indian government tenders worth approximately £38 billion.[21] Companies incorporating at least 20% UK content may qualify as Class 2 local suppliers under Make in India procurement rules. Customs clearance is expected within 48 hours when no inspection is required. Digital provisions recognise electronic contracts and authentication, protect source code, support secure transactions and provide access to open government data. Services provisions create pathways for professional recognition and improve access across 36 service sectors.
The UK will also reduce tariffs to nil across a broad range of Indian products (Annex 1).
CETA also supports technology transfer, clearer rules of origin, stronger intellectual-property protection and more streamlined sanitary and phytosanitary processes. A prospective mutual recognition agreement for medical devices could accelerate market entry and reduce compliance costs. These measures create opportunities for engineering, life sciences, financial services, digital trade and green technology, not only for traditional exports.
The agreement nevertheless remains an enabler rather than a substitute for strategy. Data-localisation rules continue to evolve. Financial-services integration is incomplete, and market entry will still depend on quotas, standards, state regulation and local-content requirements. Scottish companies will need to combine the agreement's benefits with careful state selection, credible partners and sector-specific compliance planning.
Contact
Email: Monika.Wieckowska@gov.scot