On July 24, 2025, India and the United Kingdom (UK) signed a landmark Comprehensive Economic and Trade Agreement (CETA) to strengthen bilateral trade, investment, and economic cooperation. The pact was signed during Prime Minister (PM) Narendra Modi’s official visit to the UK at Chequers, Buckinghamshire, UK.
Key Signatories:
The agreement was signed by Union Minister Piyush Goyal, Ministry of Commerce and Industry (MoC&I), Government of India (GoI), and Jonathan Reynolds, UK Secretary of State for Business and Trade, in the presence of Narendra Modi, Prime Minister (PM) of India, and Keir Starmer, PM of the UK.
Key Highlights of CETA:
Objective: CETA covers trade in goods and services, digital trade, telecommunications, financial and professional services, labour mobility, intellectual property, Small and Medium Enterprises (SME) support, and environmental provisions.
Economic Context:
- The deal aims to double bilateral trade from USD 56 billion (2025) to USD 112 billion by 2030.
- CETA contains 26 chapters, covering areas such as goods, services, digital trade, Intellectual Property (IP), and sustainability.
Tariff Reductions:
India’s Commitments:
- Elimination of duties on 99% of tariff lines, covering almost 100% of the bilateral trade value.
- 99% of UK exports (e.g., whisky, automobiles, medical devices) to gain zero-duty access.
- Whisky tariffs to be reduced from 150% to 75% immediately, and further down to 40% over 10 years.
UK’s Commitments:
- Reduction in 90% of tariff lines, with 85% reaching zero-duty status within 10 years.
- Benefits key Indian sectors: textiles, gems, pharmaceuticals, and engineering goods.
Services & Mobility Provisions:
- UK’s first-ever services commitment under a trade deal: Opens up Information Technology (IT), finance, education, and telecom sectors.
- Double Contribution Convention (DCC): Indian professionals exempt from UK social security contributions for 3 years, boosting take-home salaries.
- UK to issue 1,800 annual visas for Indian chefs, yoga instructors, and musicians.
IP Protections:
Geographical Indications (GIs) are to be protected for iconic products such as Scotch whisky (UK) and Basmati rice (India).
Sectoral Impact:
India’s Gains:
- Labour-intensive sectors: Textiles, leather, marine products, and gems.
- Projected USD 7.5 billion gain in engineering exports by 2030.
- Agriculture: Duty-free access for over 95% of products, including fruits, spices, and millets (Note: Dairy sector excluded).
UK’s Gains:
- Easier access to India’s growing middle-class market (expected 60 million by 2030).
- Key sectors to benefit: Automobiles, Scotch whisky, and pharmaceuticals.
- Expected to boost the UK’s GDP by 4.8 billion pounds sterling annually and attract 6 billion pounds sterling in new investments.
