India-UK CETA: A New Era of Economic Partnership Unveiled

New Delhi, India & London, UK – A significant stride in international trade relations was marked on July 27, 2025, with the signing of the Comprehensive Economic and Trade Agreement (CETA) between India and the United Kingdom. This landmark agreement, signed by India’s Commerce and Industry Minister Shri Piyush Goyal and UK Secretary of State for Business and Trade Mr. Jonathan Reynolds, in the presence of Prime Minister Shri Narendra Modi and UK Prime Minister Sir Keir Starmer, is set to redefine bilateral economic ties and accelerate inclusive growth for both nations.

The CETA is a strategic partnership designed to strengthen economic ties and boost bilateral trade, with an ambitious target to double the current USD 56 billion trade by 2030.

Key Highlights of CETA:

1. Unprecedented Tariff Elimination The agreement eliminates tariffs on 99% of India’s exports to the UK, covering nearly 100% of the trade value. This massive reduction targets key labor-intensive sectors such as:

• Marine Products, Textiles, Leather, and Processed Foods: Tariffs, previously as high as 70%, have been reduced to zero.
• Indian Agriculture: Nearly all Indian agricultural exports will enter UK markets duty-free, with limited exceptions. This includes fresh grapes, processed food preparations, bakery items, preserved vegetables, fruits, nuts, and sauces, positioning India to outcompete major global players.
• Engineering Goods: With tariffs cut by up to 18%, exports in this sector are projected to double, reaching over USD 7.5 billion by 2029-30.
• Textiles and Clothing: Eliminating the previous 12% duty, this sector is poised for exponential growth, particularly in ready-made garments, home textiles, carpets, and handicrafts. India aims to aggressively close the gap with leading textile suppliers like China and Bangladesh.
• Leather & Footwear Products: Products in this category, which previously faced duties of up to 16%, now enjoy 0% duty. Exports are conservatively projected to exceed USD 900 million.
• Pharmaceuticals: Zero tariffs on generics and medical devices (previously 2-6%) will significantly enhance the competitiveness of Indian pharma in the UK market.
• Chemicals: Duty-free access opens doors to the UK’s USD 28.35 billion chemicals market for Indian exporters.

2. Boost for Services and Professional Mobility Recognizing services as a core strength of India’s economy, the CETA provides deeper market access across a wide range of sectors, including IT, financial services, education, and healthcare.

• Mobility Provisions: The agreement simplifies entry for business visitors, professionals, and intra-corporate transferees.
• Cultural Exchange: The UK will permit 1,800 Indian chefs, yoga instructors, and artists annually under contractual service quotas.
• Double Contribution Convention (DCC): A groundbreaking feature, the DCC will save Indian companies and workers over INR 4,000 crore (approximately USD 500 million annually) by eliminating dual social security payments for up to three years on temporary assignments. This is expected to benefit around 75,000 workers and over 900 companies.
• Digitally Delivered Services: The UK has provided significant commitments for digitally delivered services, a major boost for India’s IT/ITES sector.

3. Consumer Benefits and Safeguards Consumers in both countries are set to benefit from a wider choice of products, lower prices, and robust digital trade protections. India has strategically safeguarded sensitive sectors like dairy, cereals, and certain essential oils, and will implement gradual tariff reductions for products under “Make in India” or PLI initiatives over 5, 7, or 10 years. Bilateral safeguards are also in place to manage any sudden import surges.

4. Simplified Rules of Origin The agreement streamlines compliance by allowing exporters to self-certify the origin of products, reducing paperwork and time. For small consignments under £1,000, no origin documentation is required, supporting e-commerce and small businesses.

As stated by Commerce and Industry Minister, Shri Piyush Goyal, “This FTA will serve as a catalyst for inclusive growth, benefiting farmers, artisans, workers, MSMEs, startups, and innovators while safeguarding India’s core interests and accelerating our journey towards becoming a global economic powerhouse.”

This comprehensive agreement is not merely a trade deal but a strategic partnership poised to unlock immense potential and foster greater economic resilience between India and the UK.

Key Takeaways from the India-UK CETA:

• Significant Market Access: India gains nearly 100% duty-free access for its goods to the UK market, particularly benefiting labor-intensive sectors.
• Boost for Agriculture and Manufacturing: Indian agricultural products and various manufacturing sectors (textiles, leather, engineering, pharma, chemicals) are set to see substantial export growth due to tariff elimination.
• Strong Emphasis on Services: The agreement prioritizes India’s service sector, offering enhanced market access and simplified professional mobility, including a unique Double Contribution Convention.
• Consumer Advantages: Consumers in both nations will benefit from a wider variety of products at competitive prices.
• Strategic Safeguards: India has implemented safeguards to protect sensitive domestic sectors and manage import surges, ensuring balanced growth.
• Ease of Doing Business: Simplified rules of origin and self-certification will reduce trade barriers and facilitate smoother cross-border transactions, particularly for small businesses.

INDIA-UK FTA INKED

How India Gains

• *Applies to 97.1% of tariff lines
• Source: Ministry of Commerce & Industry

Please note that the provided press release does not contain any specific charts or comparison sheets with detailed data.

For more details, you can refer to the official press release from the Press Information Bureau: Press Note Details: Press Information Bureau