India-UK Comprehensive Economic and Trade Agreement (CETA)
The India-UK Comprehensive Economic and Trade Agreement (CETA) is a pivotal agreement that significantly enhances trade relations between India and the UK.
Key Features of CETA
- Duty-Free Access:
- 99% of Indian goods entering the UK will be duty-free or will attract reduced tariffs.
- 90% of UK goods entering India will enjoy the same benefits.
- Sectoral Benefits:
- Reduces tariffs on textiles, leather, gems and jewelry, engineering goods, marine products, pharmaceuticals, and processed food.
- Enhances market access for services, digital trade, and government procurement.
- Economic Impact:
- Bilateral trade expected to double from the current level of about £48 billion annually by 2030.
- Projected to boost long-term economic growth in both countries.
Social Security Agreement
- Exempts Indian professionals on temporary UK assignments of up to 60 months from making social security contributions in both countries.
- Aims to reduce costs for employees and employers.
Statements and Implications
- Prime Minister Narendra Modi described the agreements as a significant moment, emphasizing benefits for farmers, entrepreneurs, and MSMEs.
- British High Commissioner Lindy Cameron termed it the “new gold standard of trade deals”.
- Commerce and Industry Minister Piyush Goyal highlighted the creation of unique opportunities for businesses.
Specific Tariff Reductions
- Import duty on Scotch whisky reduced from 150% to 75%, significantly affecting consumer prices.
- Import duties on premium UK-built cars to fall from over 110% to 10%.
Initial Effects
- Merchandise trade between the countries was valued at US$ 25.1 billion in 2025-26.
- Bilateral services trade stood at US$ 35.4 billion in 2024.
- Goods worth US$ 140 million were shipped on the first day under the agreement.
