India-U.K. Comprehensive Economic and Trade Agreement (CETA)
Relations between India and the United Kingdom have been significantly enhanced with the signing of the Comprehensive Economic and Trade Agreement (CETA) in July 2025. This agreement is poised to serve as a strategic foundation for expanding trade, investment, and cooperation across various sectors.
Strategic Importance
- The agreement aims to scale up bilateral relations and position both nations as partners in progress.
- It provides a framework amidst shifting trade regimes, geopolitical realignments, and increased competition for technology, capital, and talent.
- The visit of British Prime Minister Keir Starmer to India marks a commitment to consolidating these ties.
India's Expanding Economic Partnerships
- India's Trade and Economic Partnership Agreement (TEPA) with the European Free Trade Association (EFTA) came into effect on October 1, with EFTA countries pledging $100 billion of investment over 15 years.
- Ongoing negotiations with the European Union, India’s second-largest trading partner, are progressing well, with bilateral trade valued at $136.5 billion in 2024-25.
Key Features of CETA
- The agreement aims to double bilateral commerce by 2030.
- India will benefit from lower tariffs on exports such as textiles, agricultural goods, and pharmaceuticals.
- The U.K. will secure reduced duties on Scotch whisky, automobiles, and other high-value exports.
Supporting Agreements
- The Double Contributions Convention (DCC) exempts Indian professionals from double social security contributions in the U.K. for up to three years, easing mobility and reducing costs.
- Negotiations are underway for a bilateral investment treaty, promising to boost the U.K.’s investments in India.
Vision 2035 Road Map
- Focuses on deeper cooperation in defense, technology, climate action, education, and mobility.
- The Defence Industrial Road map and Technology Security Initiative (TSI) are key components.
Opportunities and Challenges
- Both countries aim for trade liberalization combined with joint investments in sustainability and technology.
- For Indian industry, sectors such as renewables, electric mobility, digital finance, and higher education present significant opportunities.
- Policymakers need to align regulatory frameworks and reduce barriers to maximize CETA's benefits.
By deepening their partnership, India and the U.K. aim to position themselves as not only trusted economic partners but also co-architects of a more resilient and technology-driven global order.
