Trade Agreement Yields Mutual Benefit for India and Britain
The Comprehensive Economic and Trade Agreement (CETA) between India and the United Kingdom, signed on July 24, 2025, promises significant benefits and strategic implications for both nations.
The Agreement, if approved by the British Parliament, could lead to shared prosperity by offering approximately 99% of Indian exports to the UK duty-free. This significant concession covers nearly the entire trade value, especially benefiting labour-intensive sectors like textiles, agriculture, and pharmaceuticals. The UK will also reduce tariffs on 90% of its tariff lines, with 85% becoming zero-duty within 10 years[1][4].
The CETA deal is projected to increase UK exports to India by nearly 60% and UK imports from India by 25% over the long term, pushing bilateral trade up by nearly 39%—equivalent to about £25.5 billion annually by 2040[2].
The pact enhances market access for services and facilitates professional mobility, particularly benefiting sectors such as FinTech and financial services. It includes fair treatment clauses and regulatory transparency for Indian firms operating in the UK[1][3].
Besides tariff cuts, the FTA establishes a framework to deepen cooperation with streamlined customs processes, paperless digital trade, and commitments to clear goods within 48 hours. It promotes supply chain diversification, cross-border investment, and innovation cooperation under the broader India-UK Vision 2035 strategic partnership[1][3][4].
Measures include simplified customs for qualified traders, duty suspension, periodic payment options, and protections against forced source code disclosure. Although not mandating unrestricted cross-border data flows, the agreement sets groundwork for negotiated data localization rules balanced for both sides[3].
The CETA deal presents a win-win situation, provided both India and the UK follow through on the agreement in letter and spirit. Tougher negotiations with the US may not be as accommodating regarding India's concerns for its foodgrain, dairy, and fruit farmers, making the CETA deal a potential template for deals with other first-world economies.
The ties between India and the United Kingdom, as portrayed in the CETA deal, are characterized by a sense of equity and lack of baggage from the past. The reduction in duties on British Scotch is a concession that was a significant factor in the negotiations. Luxury car bookings in India are being cancelled or deferred due to the promise of reduced duties on British SUVs.
Skilled Indian workers can take jobs in the UK without paying for social security for three years and avoid double taxation under the CETA deal. The UK will eliminate tariffs on 99% of Indian exports, potentially granting free access to the British market for Indian agricultural products and processed foods. Ease of business is promised in the CETA deal, although India's sluggish bureaucracy and red tape may cause skepticism.
In summary, the India-UK CETA is a comprehensive trade pact with far-reaching economic, strategic, and operational benefits designed to deepen bilateral trade, reduce barriers, and catalyse mutual growth across multiple sectors and future-oriented areas. The British and Indian economies are now resolving to trade as equals, with the CETA deal acting as a stepping stone towards a closer partnership.
[1] India-UK CETA Factsheet: https://www.gov.uk/government/publications/india-uk-cepa-factsheet [2] India-UK CETA: A game-changer for bilateral trade: https://www.livemint.com/industry/services/india-uk-ceta-a-game-changer-for-bilateral-trade-11627107014216.html [3] India-UK CETA: What's in it for India?: https://www.thehindu.com/business/India-UK-CETA-Whats-in-it-for-India/article38749071.ece [4] India-UK CETA: A new era of trade and investment: https://www.ft.com/content/51694d30-c70f-4151-a61d-c211faa755a4
- The CETA Agreement, if approved by the British Parliament, could lead to significant financial gains for India, especially in sectors like textiles, agriculture, and pharmaceuticals, as nearly 99% of its exports to the UK would be duty-free.
- The CETA deal is expected to considerably increase the UK's exports and imports from India, and could potentially accelerate the Britain-India strategic partnership by fostering innovation cooperation, streamlined customs processes, and professional mobility in industries such as FinTech and financial services.
