Trade Agreementlabeled a 'Mutual Victory' for India and Britain

Trade Agreementlabeled a 'Mutual Victory' for India and Britain

The Comprehensive Economic and Trade Agreement (CETA) between India and the United Kingdom was signed on July 24, 2025, marking a significant milestone in bilateral economic relations. The agreement, aimed at doubling trade from nearly USD 56 billion to over USD 100 billion by 2030, promises wide-ranging benefits across agriculture, manufacturing, services, and governance cooperation [1][2][4].

Key details of the agreement include:

• Unprecedented duty-free access for 99% of Indian exports to the UK, covering almost the entire trade basket [1]. This benefits labor-intensive sectors such as textiles, marine products, leather, footwear, sports goods, toys, gems and jewelry, as well as fast-growing sectors like engineering goods, auto components, and organic chemicals [1][4].
• Indian agricultural and processed food products, including staples like turmeric, pepper, cardamom, mango pulp, pickles, pulses, shrimp, tuna, fishmeal, coffee, and spices, now receive zero tariffs on over 95% of tariff lines, expected to boost agri-exports by more than 20% within three years [4].
• The agreement also facilitates mobility visas for Indian workers, easing previous contentious issues [2].
• For the UK, the deal is projected to inject over $6.5 billion into the British economy and attract more than $8 billion in mutual investments, including significant business expansions by British companies such as Airbus and Rolls-Royce in India [3][4].
• Financial and professional services benefit from locked-in access and equal treatment provisions, with the insurance sector’s foreign investment cap binding India to a level playing field for UK firms [4].
• Beyond trade, the CETA strengthens cooperation in tackling corruption, serious fraud, organized crime, and irregular migration via enhanced intelligence sharing and operational collaboration [4].

The CETA deal was negotiated starting in January 2022, relaunched in early 2025, and concluded under the leadership of Indian Prime Minister Narendra Modi and UK Prime Minister Keir Starmer, who both emphasized the FTA as a significant step toward inclusive growth and a reinforced strategic partnership encompassing broader areas such as energy and security [2][3].

Potential impacts of the CETA deal include:

• Significant growth opportunities for Indian exporters in diverse sectors, bolstering India's economic growth and employment, especially in MSMEs and labor-intensive industries [1][4].
• Strengthening of UK-India strategic and economic ties, potentially positioning both countries as key partners in global trade and investment networks post-Brexit [2][3].
• Expected boost in bilateral investments and economic activity, contributing to job creation and innovation [3][4].
• Enhanced regulatory cooperation and dispute resolution mechanisms that provide greater certainty and stability for businesses operating in both markets [4].
• Social impacts include greater opportunities for Indian professionals to work in the UK, potentially contributing to skill development and remittance flows [2].

The CETA deal also provides India with easy access to products from advanced technological industries such as aerospace, medical devices, semiconductors, and cyber security. However, it does not include concessions for India's foodgrain, dairy, and fruit farmers, as tougher negotiations with the US may not be so accommodative regarding these concerns [5].

The deal comes at a time of global churning in trade, with multilateralism fading and Trump tariff tantrums triggering bizarre responses. Despite skepticism due to India's sluggish bureaucracy and notorious red tape, the deal promises ease of business [6]. Scotch drinkers may pay less in the future due to a reduction in duties, but it may be a while before prices come down in India [7]. Luxury car bookings in India are being cancelled or deferred due to the promise of reduced duties on British SUVs [8].

Overall, the India-UK CETA establishes a comprehensive framework to accelerate trade, investment, and partnership growth, with wide-ranging benefits across agriculture, manufacturing, services, and governance cooperation [1][4]. If the British Parliament gives its assent, the deal could lead to shared prosperity. India has managed to protect its domestic agricultural economy from international market forces, ensuring a balance in the agreement. The deal is seen as favorable to India, with the UK believing it will gain from a vital partnership with an old ally [9].

References:

[1] "India and UK sign trade deal to boost bilateral trade". The Economic Times. (July 24, 2025).

[2] "India-UK Comprehensive Economic Partnership Agreement (CEPA)". Ministry of Commerce and Industry, Government of India. (July 24, 2025).

[3] "India-UK trade deal: What's in it for us?". The Times of India. (July 24, 2025).

[4] "India-UK CEPA: What the deal means for India". Business Standard. (July 24, 2025).

[5] "India-UK trade deal: What's not in it for India?". The Indian Express. (July 25, 2025).

[6] "India-UK trade deal inked at a time of global trade churn". The Hindu. (July 24, 2025).

[7] "Scotch drinkers may pay less due to India-UK trade deal". The Financial Express. (July 25, 2025).

[8] "Luxury car bookings in India affected due to UK-India trade deal". Auto Car India. (July 25, 2025).

[9] "India-UK trade deal: A win-win for both countries". The Business Standard. (July 25, 2025).

1. The India-UK Comprehensive Economic Partnership Agreement (CEPA) could boost Indian finance and business significantly, with the potential for substantial growth opportunities for Indian exporters across diverse sectors, particularly in labor-intensive industries and fast-growing sectors.
2. As part of the agreement, the financial and professional services sector in India benefits from locked-in access and equal treatment provisions, which offer British firms a level playing field in foreign investment.

Read also: