India and UK Sign CETA to Boost Trade and Eliminate Tariffs on Exports

The UK and India have signed the Comprehensive Economic and Trade Agreement (CETA), aiming to double bilateral trade to $56 billion by 2030. The agreement eliminates tariffs on processed foods, niche products, and agricultural goods, with potential growth of 70% for processed foods, 20% for marine food, and zero duty market access for agriculture and allied goods. The UK is a high-value market for Indian agri-products such as tea, mangoes, grapes, spices, and marine products.

The United Kingdom and India have signed the Comprehensive Economic and Trade Agreement (CETA), a landmark bilateral free trade agreement aimed at doubling bilateral trade to $56 billion by 2030. The agreement, signed by Commerce and Industry Minister Shri Piyush Goyal and UK Secretary of State for Business and Trade Mr. Jonathan Reynolds, marks a significant milestone in their longstanding partnership.

CETA eliminates tariffs on a wide range of products, including processed foods, niche products, and agricultural goods. This move is expected to significantly boost trade between the two countries. The agreement provides duty-free access to 99% of India’s exports to the UK, covering nearly 100% of the trade value. This includes labor-intensive sectors such as textiles, leather, marine products, gems and jewelry, and toys, as well as high-growth sectors like engineering goods, chemicals, and auto components.

The agreement is particularly beneficial for the agricultural sector, which accounts for 14.8% of all product tariff lines. The UK is a high-value market for Indian agri-products such as tea, mangoes, grapes, spices, and marine products. The elimination of tariffs on these products is expected to drive a 70% growth in processed foods, a 20% increase in marine food, and zero duty market access for agriculture and allied goods.

The agreement also includes provisions for professional mobility, simplifying entry for contractual service suppliers, business visitors, intra-corporate transferees, and independent professionals. This is expected to create high-value opportunities and job creation in sectors such as IT, healthcare, finance, and education.

The Double Contribution Convention (DCC) in the agreement is a notable innovation. It exempts Indian workers and their employers from paying UK social security contributions for up to three years when on temporary assignments. This is expected to benefit around 75,000 workers and over 900 companies, resulting in savings of more than INR 4,000 crore.

Overall, CETA is expected to create jobs, boost exports, and strengthen the economic resilience of both countries. The agreement combines tariff reduction, simpler rules for trade, strong provisions for services, and measures that make professional mobility easier, opening new avenues for trade and investment while protecting India’s core economic interests.

References:
[1] https://www.linkedin.com/posts/agprachi_how-the-uk-india-trade-deal-shapes-women-activity-7354532800730976256-PP8h
[2] https://www.pib.gov.in/PressNoteDetails.aspx?ModuleId=3&NoteId=154945&id=154945