India-UK FTA to come into force by mid-May, Pg15

Key Highlights:

• The Comprehensive Economic Partnership Agreement (CETA) between India and the UK is expected to be in force by mid-May.
• The agreement was signed in July 2025 and has been vetted by both houses of the UK Parliament in March.
• The CETA will allow 99% of Indian exports to enter the UK duty-free.
• India will reduce or eliminate duties on 90% of tariff lines from the UK, accounting for 92% of imports.
• The Double Contribution Convention (DCC) will also come into force, exempting Indian professionals from social security payments in the UK for up to three years.
• The immediate target for the FTA is to double bilateral trade to $120 billion by 2030, from $56.9 billion in FY25.

Detailed Insights:

• The ratification of FTAs in India is an executive process that requires only Cabinet approval.
• Post-ratification, customs notifications are needed to update the national tariff schedule, aligning it with the commitments in the agreements.
• The DCC ensures that employees moving between the UK and India only pay social security contributions in one country at a time.
• The CETA aims to enhance economic cooperation and trade relations between India and the UK, fostering growth and investment.
• Discussions on the agreement began in January 2022 and concluded on May 6 of the previous year.

Key Concepts Involved:

• FTA (Free Trade Agreement): An agreement between two or more countries to reduce or eliminate trade barriers.
• Ratification: The process of formally approving an agreement, making it officially valid.
• Tariff: A tax or duty imposed on goods when they are transported across international borders.