India-UK Free Trade Agreement (CETA)
The Comprehensive Economic and Trade Agreement (CETA) between India and the UK, signed in July 2025, is expected to be implemented by April 2026. The agreement aims to enhance trade relations by eliminating or reducing tariffs on various goods between the two countries.
Key Features of CETA
- 99% of Indian exports will enter the UK market at zero duty.
- Reduction of tariffs on British products such as cars and whisky in India.
- India will progressively lower tariffs on Scotch whisky from 150% to 75% immediately and further to 40% by 2035.
- Import duties on automobiles will be reduced to 10% over five years, down from up to 110% currently, under a liberalized quota system.
- The agreement aims to double the USD 56 billion trade between the two countries by 2030.
Approval and Implementation
- The agreement requires approval from the UK Parliament and the Indian Union Cabinet.
- Implementation will occur on a mutually agreed date after ratification by the British Parliament.
- The British Parliament is conducting debates and reviews across both the House of Commons and House of Lords.
Benefits and Strategic Goals
- The pact is described as a "momentous achievement" for the UK, enhancing trade opportunities.
- India gains increased market access for goods such as textiles, footwear, gems and jewellery, sports goods, and toys.
- India opens its market for consumer goods like chocolates, biscuits, and cosmetics from the UK.
- Facilitates access for Indian manufacturers to the UK market for electric and hybrid vehicles within a quota framework.
Double Contributions Convention (DCC)
- The DCC pact is also signed to prevent temporary workers from duplicating social levies in either country.
- Both the CETA and DCC are anticipated to be implemented simultaneously.
