India-UK Comprehensive Economic and Trade Agreement (CETA) and MSMEs

The recently signed Comprehensive Economic and Trade Agreement (CETA) between India and the U.K. includes significant features aimed at benefiting Indian Micro, Small, and Medium Enterprises (MSMEs). Indian negotiators are working to incorporate similar provisions in future trade agreements with the U.S. and the EU.

Key Features of India-U.K. CETA for MSMEs

• A dedicated chapter for SMEs to enhance cooperation and information sharing.
• Establishment of MSME contact points in both countries.
• Sharing of information on regulations, certifications, and market opportunities.
• Provisions for trade promotion activities such as exhibitions and business-to-business (B2B) events.
• Mechanism to address non-tariff barriers affecting MSMEs.

Public Procurement Provisions

• U.K. suppliers to be classified as ‘Class-II local suppliers’ in Indian government tenders above certain thresholds.
• Indian suppliers, including MSMEs, to receive preferential treatment as ‘Class-I local suppliers.’

Focus Sectors

• Textiles, footwear, leather products, marine products, toys, sports goods, and gems and jewelry.
• These sectors are labor-intensive and have a significant contribution from the MSME sector.
• Free access to the U.K. market is expected to boost these sectors, impacting jobs and income, especially in rural and semi-urban areas.

Technical Cooperation and Support

• Encouragement of technical cooperation to boost MSME capabilities.
• Setup of workshops and training programs on standards, sustainability, and export readiness.
• Joint efforts to promote women-owned and rural MSMEs.