India-UK CETA: Can tariff gains reshape the air cargo corridor?

The India-UK trade relationship has entered a new phase.

When the Comprehensive Economic and Trade Agreement (CETA) came into force on July 15, 2026, it did more than remove tariffs. It changed the commercial equation for companies deciding what to source, where to manufacture and how to move goods between the two markets.

For Indian exporters, the agreement provides preferential access to one of the world's major consumer markets at a time when manufacturers are looking to diversify international supply chains and expand bey ond traditional markets. For UK businesses, it creates greater access to India's large and growing consumer and industrial economy.

The UK government says 99% of Indian goods entering the UK will be duty-free or benefit from reduced tariffs from the start of the agreement, while India has agreed to remove or reduce tariffs on 90% of tariff lines covering 92% of existing goods imports from the UK.

Though the effect on logistics will not be instantaneous, companies will still need to establish sourcing arrangements, confirm tariff classifications, meet rules of origin, complete documentation and align production with transport capacity. But across airports, airlines and logistics companies, there is already a sense that the agreement could reshape the India-UK cargo corridor over the next several years.

The opportunity is significant, with bilateral trade already valued at $56 billion annually, as announced in May 2025 following the successful conclusion of negotiations. Both countries have set a target of doubling bilateral trade to $100–120 billion by 2030, with the industry expecting further growth as tariff advantages begin to influence sourcing, production and commercial decisions.

For R S Subramanian, Senior Vice President for South Asia & Managing Director for India, DHL Express, the agreement is therefore about more than simply reducing the cost of individual shipments.

“The agreement is expected to create new opportunities for Indian exporters while improving access to specialised UK-origin goods that can support India's manufacturing ecosystem.”
R S Subramanian, DHL Express

“The India-UK Free Trade Agreement marks a significant milestone in strengthening bilateral trade and economic cooperation between the two countries. By enhancing market access and providing duty advantages for a range of products, the agreement is expected to create new opportunities for Indian exporters while improving access to specialised UK-origin goods that can support India's manufacturing ecosystem,” said Subramanian.

From tariff concessions to physical trade
The most immediate beneficiaries are expected to include labour- and value-intensive Indian sectors such as textiles and apparel, leather and footwear, engineering products, marine products and selected agricultural goods. The agreement also creates opportunities for pharmaceuticals, electronics, automotive components, chemicals, gems and jewellery and other high-value products.

According to Trezix, a B2B SaaS platform for export and import operations, and its Co-Founder and Chief Executive Officer, Haresh Calcuttawala, immediate zero-duty access to textiles & apparel will strengthen India’s competitiveness against Bangladesh and Vietnam, while particularly benefiting MSMEs and women-led manufacturing units. Meanwhile, reduced or zero tariffs on most generics, combined with greater access to the UK National Health Service (NHS) procurement market and secured IP protections, could help Indian pharma expand its already significant share of the UK generic-drug market.

For logistics providers, however, the important question is not simply which products become cheaper. It is whether those tariff advantages are strong enough to change sourcing patterns and generate additional shipments.

DP World's Manisha Malhotra, Vice President – Freight Forwarding, Logistics, SCO (India), describes this as the central test for the agreement. She said, “Trade agreements are often measured by the tariffs they remove. Their true success, however, is determined by the capabilities they unlock.”

“Trade agreements are often measured by the tariffs they remove. Their true success, however, is determined by the capabilities they unlock.”
Manisha Malhotra, DP World

The distinction matters. A tariff reduction can make an export commercially attractive, but the physical movement of that product still depends on whether exporters can meet origin requirements, whether production can scale, whether transport capacity is available and whether customs processes work efficiently.

Malhotra believes the agreement could accelerate India's integration into higher-value global value chains. “The UK–India Comprehensive Economic and Trade Agreement marks an important shift in the trade relationship between two economies with complementary strengths. Preferential access across sectors including automotive, engineering, textiles, leather, footwear and food products has the potential to accelerate India's integration into higher-value global value chains.”

For the logistics industry, that could mean a broader and more diversified cargo basket rather than simply higher volumes of existing trade.

UK-India relationship & diaspora
While it is only the early days to notice the change in volumes, Asad Mirza, Director at Cargo Force, points out that they've seen a clear rise in customer enquiries, with people asking whether sending to India will now become cheaper, or assuming their parcels will be duty-free because of the deal.

However, he notes that there's a genuine gap between expectation and reality there, and part of our job right now is education. “On volumes, our corridor has been growing steadily anyway; we've handled over 52,000 shipments in the past two years at a 99% delivery success rate, but that growth predates the agreement. If the CETA delivers smoother customs over time, it will reinforce a trend that was already underway,” he said.

Cargo Force is a UK-based freight forwarding and logistics company specialising exclusively in cargo and courier services between the United Kingdom and India.

Mirza also pointed to a segment that rarely makes these lists: personal cargo and diaspora-driven shipments. “The British Indian community is one of the most active "living bridges" in global trade, and household goods, gifts and small e-commerce parcels are a fast-growing part of this corridor. That's the segment we see first-hand every day, and a more efficient customs environment benefits those flows just as much as it benefits any commercial sector,” he adds.

In his plan for Cargo Force, he argues that it should go deeper rather than wider. “First, deepening our reach into Tier-1, Tier-2 and Tier-3 India, where demand is growing fastest, cities like Mumbai, Delhi, Lucknow, Kochi and Surat are no longer the exception for us; they are core business,” he said.

“Second,” he added, “investing further in our digital platform so booking, documentation and tracking stay as simple as customers now expect. And third, preparing capacity well ahead of peak periods like the festive season, because a growing corridor is only useful to customers if it stays reliable when everyone ships at once.”

Heathrow: An established corridor ready for growth
Nowhere is the existing strength of the India-UK air cargo relationship more evident than at Heathrow. India ranked as Heathrow's second-largest cargo market by tonnage in the first half of 2026, with more than 75,000 tonnes of import and export cargo moving between the airport and India during the period. That gives Heathrow an established base from which to capture incremental growth as the CETA changes trade economics.

James Golding, Head of Aviation – Cargo and Airline Partnerships, Heathrow Airport, expects the agreement to provide positive momentum, particularly for high-value and time-sensitive commodities. “The India–UK Free Trade Agreement is expected to create positive momentum for air cargo flows between the two countries over the coming years, particularly in high-value, time-sensitive sectors.”

Golding expects growth to develop progressively as businesses adapt their supply chains and trading arrangements rather than immediately after the agreement takes effect. The commodities expected to benefit include pharmaceuticals, apparel and textiles, engineering components and perishables from India. In the opposite direction, premium food and beverage products, luxury goods and other high-value consumer products from the UK could gain.

This two-way flow is particularly important for airlines. As demand develops, Golding expects carriers could consider additional passenger frequencies, larger aircraft or ad-hoc freighter operations. “Overall, the long-term outlook for the corridor remains positive, with Heathrow expected to continue playing a central role in facilitating and enabling bilateral trade,” he added. The airport's established cargo infrastructure and global connectivity therefore provide an important foundation for the next phase of India-UK trade.

“The India–UK Free Trade Agreement is expected to create positive momentum for air cargo flows between the two countries over the coming years, particularly in high-value, time-sensitive sectors.”
James Golding, Heathrow Airport

With the UK-India CETA now in force, IAG Cargo has already expanded its India network, adding a third daily London Heathrow–Delhi service from September 19, 2026. Operated year-round by British Airways using a Boeing 787-8 Dreamliner, the expanded schedule includes three daily services to both Delhi and Mumbai, alongside increased frequencies to Bengaluru. This takes IAG Cargo’s London Heathrow–India capacity to 70 weekly services, up from 56 in 2025, supporting growing cargo demand between India, the UK and international markets.

Bengaluru sees opportunity in South India's export base
If Heathrow represents an established international gateway, Bengaluru International Airport (BLR) illustrates how the CETA could strengthen regional manufacturing and export ecosystems. South India already has a broad export base spanning pharmaceuticals, electronics, engineering, aerospace, automotive components, fashion and perishables.

According to Arun Chandra, VP, Aviation Business, Bangalore International Airport Ltd. (BIAL), BLR and the UK are connected by 34 weekly direct flights each way, operated by Virgin Atlantic, British Airways and Air India, providing significant belly-hold capacity. He added, “The BLR-UK trade lane currently accounts for approximately 1,200 metric tonnes of air cargo per month.” Its cargo mix is similarly diverse, covering high-tech products, pharmaceuticals, fruits and vegetables, fashion, automobiles, aerospace and general cargo.

“The BLR-UK trade lane currently accounts for approximately 1,200 metric tonnes of air cargo per month.”
Arun Chandra, Bangalore International Airport

BIAL expects CETA to act as a structural tailwind over the next 12–24 months, with benefits becoming more visible through FY27 as enquiries convert into confirmed orders and shipments, said Arun Chandra, VP, Aviation Business, Bangalore International Airport Ltd. The gradual ramp-up reflects the time businesses need to adjust sourcing, documentation and transport strategies. That timeline reflects an important reality for the logistics industry: trade policy can change overnight, but supply chains do not.

BLR Airport is preparing for potential growth with more than 1 million tonnes of annual cargo capacity, including two common-user cargo terminals with international handling capacity of more than 210,000 tonnes each, a Menzies Aviation-operated domestic terminal with 360,000 tonnes of capacity and WFS-operated Coolport with 40,000 tonnes for temperature-sensitive cargo.

The airport is also strengthening its digital infrastructure through CargobyBLR and the Automated Truck Management Facility. Planned investments include expanding Coolport capacity to 80,000 tonnes and refurbishing the common-user terminals to 500,000 tonnes. Together, these investments position BLR to support the specialised, high-value and time-sensitive cargo expected from stronger India-UK trade.

Scotland sees a new frontier for salmon
The impact of CETA is already becoming visible in Scotland, where the salmon industry sees India as a potentially significant new market. The removal of the previous 33% tariff on Scottish salmon has opened access to one of the world’s largest and fastest-growing seafood markets, with the first shipment of fresh Scottish salmon from Bakkafrost Scotland reaching India.

Salmon Scotland, a trade body representing Scotland’s salmon farming sector, producers, and supply chain, which advocates for sustainable growth and supportive policy, says the opportunity could be worth tens of millions of pounds annually to Scottish producers. The development comes as Scottish salmon exports have already exceeded £6 billion over the past decade, reaching almost 100 markets worldwide, making India part of a wider diversification strategy amid global trade volatility.

“There’s definitely more demand for (air cargo) capacity in the India-UK trade lane.”
Nico Le Roux, Glasgow Prestwick Airport

Nico Le Roux, Business Development Director, Glasgow Prestwick Airport, said the industry views India as a major opportunity, with the market potentially becoming comparable with China. The opportunity is also two-way, with Indian seafood, particularly shrimp, gaining improved UK market access.

Prestwick currently has no direct cargo service to India, but Le Roux sees potential for new connectivity. The airport already handles 40–60 tonnes of salmon a day, while a new temperature-controlled facility will add 100 tonnes of capacity, supporting future flows of salmon, pharmaceuticals and other temperature-sensitive cargo.

Whisky, pharmaceuticals and aerospace add depth
Salmon is only one part of Scotland's India opportunity. Whisky is another major trade category. India is already Scotland's largest market by volume for whisky, according to Le Roux, and he expects demand for premium and high-end products to increase as the market develops.

The pharmaceutical industry is also looking in both directions, with potential for generic products from India and finished branded products from the UK. Prestwick's aerospace cluster creates another specialised opportunity. The airport is home to a number of major aerospace companies, including operations linked to companies such as GE and Collins Aerospace. Le Roux points to existing India connections and the movement of aircraft engines as an area where direct connectivity could remove intermediate hubs.

Other potential growth areas include high-tech products, renewable energy, automotive components and gems and jewellery. The breadth of those opportunities is significant because it reduces dependence on any single commodity.

For airlines, it also creates the possibility of a more balanced trade lane. With high cargo load factors between India and the UK, there’s demand for more capacity while suggesting that capacity is already relatively tight on the corridor.

He believes stronger demand on both the inbound and outbound legs could make dedicated operations easier to justify. “It's easier to balance the books when you have demand on both legs, the inbound and the outbound,” he added. Prestwick is therefore working with forwarders and industry stakeholders to build demand for a direct India service.

Mumbai is an obvious candidate, although Le Roux says New Delhi, Kolkata and southern Indian gateways could also be considered depending on where production and manufacturing demand is concentrated. He expects the first direct service could emerge within roughly six months, with the ambition of scaling towards daily operations over one to two years.

The opportunity comes with a compliance test
The biggest challenge for companies may not be physical capacity, but proving that their goods qualify for preferential treatment. The CETA’s rules of origin determine whether products are eligible for reduced or zero tariffs, requiring businesses to establish where goods and their components originate and maintain the documentation needed to demonstrate compliance.

“Simply being an Indian or UK business is not enough. Nor do goods automatically qualify for preferential origin status simply because they pass through India or the UK.”
Marc Bernitt, Kuehne+Nagel

The UK government has also set out specific origin-declaration requirements. Exporters must provide an origin declaration confirming that their goods meet CETA’s rules of origin before preferential treatment can be claimed. This makes customs and compliance a critical part of the logistics opportunity created by the agreement.

For Kuehne+Nagel, rules of origin are likely to be among the biggest challenges facing businesses. Marc Bernitt, Head of Customs EMEA & Asia, says: “Simply being an Indian or UK business is not enough. Nor do goods automatically qualify for preferential origin status simply because they pass through India or the UK.”

For manufacturers sourcing components from countries outside the CETA, determining eligibility can be particularly complex. Businesses may need supplier declarations, bills of materials and manufacturing records to demonstrate that products meet the required origin thresholds. As a result, the agreement could create demand not only for transportation, but also for customs advisory, trade compliance, warehousing and supply-chain planning.

Bernitt expects enquiries generated by the agreement to translate into measurable shipment growth over the next two to three quarters, as businesses work through tariff classifications, origin requirements and supply-chain planning.

The impact is expected to extend across multiple transport modes. On the maritime side, Nhava Sheva, Mundra and Chennai in India and Felixstowe, Southampton and London Gateway in the UK are likely to see increased bulk and containerised cargo. Air freight is expected to grow through Delhi, Mumbai, Hyderabad and Bengaluru, particularly for high-value and time-sensitive commodities such as pharmaceuticals and electronics.

The export mix is also expected to broaden, with textiles and apparel, leather and footwear, marine products and engineering goods among the key beneficiaries. Automotive components, perishables and seafood could see further gains, while Kakinada may benefit from increased rice and seafood shipments following tariff reductions.

Beyond the major gateways, the agreement could gradually reshape regional freight flows. Ahmedabad, Pune, Jaipur and Surat are attracting greater attention as manufacturing and consumption centres, while Ludhiana and Tiruppur could become increasingly important for textiles and knitwear.

As trade volumes build, the logistics implications will extend beyond ports and airports. Rising flows are expected to increase demand for warehousing, customs services, air cargo capacity and cold-chain infrastructure, creating a broader logistics ecosystem around the expanding India–UK trade corridor.

Building supply chains around the agreement
DP World’s Malhotra says the CETA will test companies’ ability to build agile and compliant supply chains. “Businesses will need supply chains that are agile, compliant, and connected.”

Rules of origin, documentation, customs and multimodal coordination will become as important as manufacturing. With more than 300 offices globally and multimodal assets across India and more than 80 countries, DP World aims to turn preferential access into “reliable trade flows and long-term growth.”

The same challenge applies to air cargo. Heathrow, BLR and Prestwick are preparing infrastructure and connectivity to ensure tariff-driven demand can translate into physical cargo flows.

The CETA could widen the trade map beyond Delhi and Mumbai. Kuehne+Nagel expects Ahmedabad, Pune, Jaipur and Surat to also gain importance, while Bengaluru remains a key manufacturing gateway. Scotland is targeting growth in seafood, whisky, pharmaceuticals and aerospace, while Prestwick sees potential from the Midlands automotive sector.

Lower tariffs create the opportunity; logistics will determine how much of it is realised. Rising trade could drive demand for customs, warehousing, multimodal transport and air and sea freight, while stronger two-way flows could support additional airline capacity. As Subramanian notes, increased trade can also enable “knowledge transfer, help accelerate innovation, capability development, and manufacturing excellence in India.”

The CETA has changed the economics of the corridor. The next test is whether infrastructure, capacity and supply chains can change with it.