Billions of pounds in potential tariff savings from the UK’s landmark trade deal with India could be at risk if the government does not rethink its plans to cut export support staff, MPs have warned, raising concerns that British businesses could struggle to translate the deal into real growth.
In a report published on Wednesday, the Business and Trade Committee said deep cuts to trade support functions within the government could undermine the effectiveness of the UK-India Comprehensive Economic and Trade Agreement (CETA), despite it being the largest bilateral trade deal since Brexit.
The warning comes as ministers submit the agreement to Parliament for ratification, starting the formal review phase. A new analysis by the committee estimates that initial tariff savings for UK exporters to India could be around £400 million a year, increasing to up to £3.2 billion a year within a decade as export volumes increase. But MPs warned that these gains may never materialize unless companies receive adequate support to navigate India’s complex administrative system and extensive non-tariff barriers to trade.
Under the deal, the government expects the UK’s GDP to rise by £4.8 billion a year by 2040 and annual bilateral trade with India to rise by £25.5 billion, a significant increase from the £43 billion in 2024. Automotive exports are expected to rise sharply, while spirits producers are also expected to benefit from significant tariff cuts. The agreement also marks the UK’s first entry into India’s central government procurement market.
Despite the scale of the opportunity, MPs said the practical challenges of operating in India could blunt the impact of the deal, particularly for small and medium-sized exporters. The committee called on the Ministry of Economy and Trade to take a much more active role in implementation, including supporting companies to use the agreement, monitoring implementation and quickly intervening if obstacles arise.
Concerns are compounded by plans to cut almost 40 percent of British trade staff who would otherwise be tasked with helping companies expand their exports to India. MPs said this creates a serious supply risk at the heart of the Government’s growth strategy.
Rt Hon Liam Byrne, chair of the Economy and Trade Committee, said Parliament would be asked to approve a deal that promises billions of pounds in tariff savings while diverting the resources needed to achieve it.
“This is the biggest free trade deal since Brexit, with the potential to deliver billions of pounds in tariff savings for UK exporters, boost growth and create new jobs,” he said. “But ratification is just the beginning. Ministers must now present a clear plan, backed by real resources, to turn access on paper into practice.”
The committee also questioned whether the agreement went far enough in terms of trade in services and access for skilled workers and said it remained skeptical about its implementation in practice. With no bilateral investment agreement included, MPs called on ministers to develop a more ambitious vision for a future agreement to enable further investment between the UK and India.
There were also warnings about possible downside risks for sectors such as textiles and ceramics, which already face stiff competition from Indian imports. MPs reiterated previous concerns that, in the absence of binding human rights provisions in the deal, the government must set clear and enforceable expectations to prevent UK companies from being undermined by labor rights abuses in overseas supply chains.
Industry experts advising the committee said the agreement could act as a catalyst for deeper cooperation if further action follows. Pankaj S. Kulkarni, head of banking, financial services and insurance at Tech Mahindra, told MPs that a bilateral investment framework was a necessary next step to leverage additional investment between the UK and India, particularly in areas such as artificial intelligence.
Mohit Joshi, chairman and managing director of Tech Mahindra, said the agreement has the potential to accelerate growth in both economies. He said India’s talent pool and technical strength, combined with the UK’s research and innovation capabilities, had created a powerful platform for long-term collaboration and security for companies operating in both markets.
The committee concluded that while the UK-India agreement lays a solid foundation, it should be viewed as a starting point rather than a finished product. Without sufficient staffing, oversight and accountability, MPs warned, the deal’s promised economic benefits risk remaining theoretical rather than transformative.
