India and the United Kingdom on Wednesday operationalised the Comprehensive Economic and Trade Agreement (CETA), marking a significant milestone in bilateral trade relations. The agreement grants duty-free access to nearly 99 per cent of Indian exports to the UK, opening one of the world’s largest consumer markets to Indian businesses while making several premium British products more affordable for Indian consumers.
The free trade agreement is expected to strengthen economic ties, boost investments, generate employment and provide fresh momentum to India’s manufacturing, agriculture and services sectors.
Commerce and Industry Minister Piyush Goyal announced that the India-UK Social Security Agreement also came into force on July 15.
He added that the agreement will provide fresh opportunities for Indian farmers, entrepreneurs and micro, small and medium enterprises (MSMEs), while enhancing cooperation in technology, innovation and professional services. The Social Security Agreement will also benefit Indian professionals working temporarily in the UK by reducing dual social security contributions, thereby improving the competitiveness of Indian businesses.
Under the agreement, import duties on almost 99 per cent of Indian goods exported to the UK have been eliminated. Products that previously attracted tariffs of up to 70 per cent will now enjoy zero-duty access, significantly improving the competitiveness of Indian exports in the British market.
Key sectors expected to benefit include:
- Textiles and garments
- Leather and footwear
- Gems and jewellery
- Marine products
- Engineering goods
- Auto components
- Processed food
- Chemicals
- Pharmaceuticals
- Agricultural products
- Tea and coffee
- Electrical machinery
- Fruits and horticultural products
The textile and apparel industry is among the biggest beneficiaries. Earlier, Indian garments and textiles faced UK import duties ranging from 4 to 16 per cent. With tariffs now reduced to zero, exporters are expected to gain a stronger foothold in the British market, boosting demand and creating employment in one of India’s largest labour-intensive sectors.
While exporters stand to gain the most, Indian consumers are also expected to benefit from lower prices of several premium British products over time. These include Scotch whisky, luxury automobiles, cosmetics, chocolates and selected food items, as tariffs on many UK exports to India are reduced under the agreement.
Trade experts say the implementation of CETA marks a new chapter in India-UK economic relations. By lowering trade barriers and improving market access, the agreement is expected to encourage greater bilateral investment, strengthen supply chains and enhance cooperation across manufacturing, services and technology sectors.
With nearly the entire value of India’s exports to the UK now eligible for duty-free access, the agreement is expected to improve the country’s export competitiveness against products from Europe, China and other global markets, while supporting long-term economic growth.
