India–UK CETA Comes into Effect

Key Highlights:

• The India-UK Comprehensive Economic and Trade Agreement (CETA) has officially come into effect.
• It grants zero-duty access on nearly 99% of India's exports to the UK, covering almost 100% of the trade value.
• The agreement includes ambitious services commitments from the UK and provisions for enhanced professional mobility for Indians.
• CETA safeguards India's sensitive sectors like agriculture and strategic industries through calibrated market access and phased tariff liberalisation.
• It aims to deepen trade, attract investment, and create new opportunities across various sectors for both nations.

Detailed Insights:

• The CETA is a modern, comprehensive, and future-oriented agreement designed to deepen economic integration between India and the UK.
• Bilateral merchandise trade reached USD 25.12 billion in 2025-26, with India holding a trade surplus of USD 1.76 billion.
• Services trade touched USD 35.44 billion in 2024, with India's services trade surplus at USD 7.88 billion.
• Indian farmers and fisherfolk are expected to benefit from improved UK market access through tariff elimination.
• Labour-intensive sectors such as textiles, leather, gems and jewellery, and food processing are poised for higher exports and job creation.
• MSMEs will gain from simplified customs procedures, paperless trade, and duty-free access for 99% of Indian exports to the UK.
• India has offered tariff concessions on 89.5% of its tariff lines, covering 91% of the UK's exports.
• Sensitive sectors like dairy, cereals, gold, smartphones, and products under Make in India and PLI Scheme are protected via exclusions or phased tariff reductions.
• Automobile sector liberalisation is quota-based and phased, protecting small and mid-segment ICE vehicles and affordable EVs.
• The CETA provides zero-duty market access across various sectors, including textiles, agriculture, food processing, marine products, engineering goods, electronics, and pharmaceuticals.
• In services, India secured commitments across 12 major sectors and 137 sub-sectors from the UK.
• Both countries will pursue Mutual Recognition Agreements (MRAs) for professional qualifications in nursing, accountancy, and architecture within 12 months.
• The UK has agreed not to impose numerical restrictions or an Economic Needs Test (ENT), facilitating smoother mobility for Indian professionals.
• A dedicated annual quota of 1,800 positions is reserved for Contractual Service Suppliers.
• The Double Contribution Convention (DCC) eliminates dual social security contributions for assignments up to 60 months, benefiting over 75,000 Indian professionals.
• The agreement strengthens market access for digitally delivered services and creates investment opportunities for Indian companies in the UK.
• Indian suppliers gain access to the UK’s government procurement market (GBP 90 billion), with reciprocal access for the UK to India’s USD 114 billion market.
• The Migration and Mobility Partnership (MMP) (2021) and Young Professional Scheme (2022) facilitate professional exchanges.
• The UK is India's 6th largest inward investor (USD 35 billion), and India's outward investment in the UK stood at USD 19 billion.

Key Concepts Involved:

• Comprehensive Economic and Trade Agreement (CETA): A broad trade pact aiming to reduce barriers and deepen economic ties between two or more economies.
• Tariff Liberalisation: The process of reducing or eliminating customs duties and other trade barriers on goods and services.
• Mutual Recognition Agreements (MRAs): Agreements between countries to recognise each other's professional qualifications, standards, or certifications.
• Double Contribution Convention (DCC): An agreement to eliminate dual social security contributions for professionals working temporarily in another country.
• Economic Needs Test (ENT): A requirement for foreign professionals to prove that no suitable local candidate is available for a job.
• Production Linked Incentive (PLI) Scheme: A government scheme offering incentives to companies for increasing domestic manufacturing and exports in specific sectors.
• Make in India: A government initiative to encourage companies to manufacture their products in India and incentivise investment.