- India and the United Kingdom signed a Comprehensive and Economic Trade Agreement (CETA) on 24th July 2025.
- Apart from reducing tariffs, the Agreement also aims to promote trade in services, through mutual recognition of professional qualifications, and facilitating investment in key sectors like technology, pharmaceuticals, clean energy, and education.
- The Agreement provides for reduction in tariffs on key products such as automotive components, machinery, food products, and alcoholic beverages.
- Presently, major products exported from India to the UK include apparel and clothing, organic chemicals, textiles, footwear, and precious metals and stones. On the other hand, India has significant imports of machinery for reactors and boilers, aluminium articles, measuring instruments, pearls and stones, and essential oils and perfumes from the UK.
- The cumulative trade involved at present between the two countries is USD 14.29 billion worth of exports from India, while goods worth USD 8.40 billion have been imported into the country.
India and the United Kingdom share a multi-faceted relationship shaped by a colonial history, vibrant people-to-people ties, and expanding economic interests. With cumulative bilateral trade reaching USD 22.7 billion in 2023–24, the two nations are strategically aligned for deeper economic engagement. Following Brexit, the UK has actively pursued new trade partnerships to strengthen its global trade footprint, identifying India as a pivotal partner in its Indo-Pacific strategy. Simultaneously, India, now the fourth-largest economy in the world with a GDP exceeding USD 3.7 trillion, has striven to assert its role as a global growth engine and investment destination. In this context, the India–UK Comprehensive and Economic Trade Agreement (CETA) stands as a landmark initiative that aims not only to enhance bilateral trade and investment flows, but also to deepen strategic, technological, and sustainable development cooperation between two major democracies.
Objectives of the India–UK CETA
The CETA aims to create a dynamic and forward-looking economic partnership. Its primary goals include:
- Reducing or eliminating tariffs and non-tariff barriers to boost bilateral trade.
- Facilitating investments in key sectors like technology, pharmaceuticals, clean energy, and education.
- Promoting services trade through easier professional mobility, qualification recognition, and streamlined visa regimes.
- Advancing climate action and sustainable development through shared commitments to labour standards and environmental safeguards.
- Encouraging innovation in areas such as fintech, cybersecurity, and digital trade.
Unlike traditional trade deals, this CETA is positioned as a strategic platform to align economic cooperation with long-term diplomatic objectives.
Key Chapters and Modern Features
The Agreement is comprehensive, encompassing 29 chapters across various sectors. Key chapters include:
- Trade in Goods: Reduction in tariffs on automotive components, machinery, food products, and alcoholic beverages.
- Trade in Services: Liberalisation in IT, finance, healthcare, and legal services, coupled with mutual recognition of professional qualifications.
- Investment Protection: Transparent regulatory environment and investor dispute resolution mechanisms.
- Digital Trade: Policies on cross-border data flows, consumer protection, and cybersecurity.
- Intellectual Property Rights: Enhanced protection for patents, trademarks, and copyrights.
- Sustainable Development: Provisions on environmental regulations, labour rights, and climate goals.
- Government Procurement: Access to public procurement markets in both countries.
- Dispute Settlement: Fair and efficient frameworks to resolve conflicts.
- Trade Remedies: Provides a structured framework to address unfair trade practices such as dumping and subsidies, and to manage import surges that threaten domestic industries. It includes provisions for anti-dumping and antisubsidy measures, global and bilateral safeguards, and transparent investigation procedures, all grounded in WTO rules.
The CETA also introduces progressive elements such as youth mobility schemes, SME support, and AI-fintech collaboration—making it a modern, inclusive trade model.
India–UK Trade at a Glance
Trade between the two countries has seen steady growth. Exports from India to the UK reached USD 14.29 billion in 2024, up from USD 7.76 billion in 2020, while imports rose from USD 4.71 billion to USD 8.40 billion in the same period. The trade balance has consistently favoured India, reaching a surplus of USD 5.88 billion in 2024.
Major products exported from the UK to India (with % tariff lines covered for tariff concessions):
- Machinery for reactors and boilers – 90%
- Aluminium articles – 89%
- Measuring instruments – 88%
- Pearls and stones – 80%
- Essential oils and perfumes – 83%
Major products exported from India to the UK (with % tariff lines covered for tariff concessions):
- Apparel and clothing accessories – 82%
- Organic chemicals – 82%
- Textile articles – 80%
- Footwear – 78%
- Precious metals and stones – 81%
The tariff concessions under the Agreement are expected to significantly lower costs and increase the competitiveness of these sectors.
Strategic Benefits of the CETA
- Tariff Elimination: Reduction in trade barriers will promote affordability and accessibility for both consumers and industries.
- Enhanced Services Trade: Indian IT, consulting, and education sectors will benefit from better mobility provisions, while UK professionals gain access to India's large market.
- Investment Growth: Stronger investor protection mechanisms will attract capital into green technologies and infrastructure.
- Support for MSMEs: Simplified compliance and digital integration will help small and medium enterprises scale operations internationally.
- Diplomatic Leverage: The CETA elevates bilateral ties into a broader global narrative, supporting democratic values and collaborative development.
- Sustainable Progress: Environmental chapters help align the CETA with global climate goals, ensuring long-term, eco-friendly trade practices.
The India–UK Agreement has the potential to become a landmark in global economic diplomacy. It blends ambition with responsibility, balancing trade growth with inclusivity and innovation with sustainability. As final negotiations reach a crucial phase in 2025, both nations have an opportunity to craft a forwardlooking agreement that can serve as a model for equitable and strategic partnerships.
More than just a bilateral deal, the India–UK CETA represents a new vision for international trade, one that reflects the aspirations of the Global South and the strategic foresight of advanced economies. This Agreement will not only increase trade volumes and job creation but also reshape how trade deals of the future are designed: people-centric, sustainable, and mutually empowering.
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