UK-INDIA Trade Pact to come into force on July 15, Pg1

Key Highlights:

• The India-UK Free Trade Agreement (FTA), officially known as the Comprehensive Economic and Trade Agreement (CETA), is set to come into force on July 15, 2026.
• Both nations resolved differences over steel trade, which had delayed the implementation of the pact.
• India's steel exports will be safeguarded through a mix of Country-Specific Quota (CSQ), residual quota, and the Authorised Use Scheme (AUS), exempting 85% of its steel shipments from new UK measures.
• The agreement is expected to significantly boost bilateral trade and investment, creating opportunities for Indian farmers, workers, and MSMEs.
• The Double Contribution Convention (DCC), easing social security obligations for temporary cross-border workers, will also take effect on the same date.

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Detailed Insights:

• The CETA aims to increase bilateral trade by £25.5 billion annually and add £4.8 billion to the UK's GDP.
• The UK's new steel measures, effective July 1, 2026, will reduce overall tariff-free import quotas by 60% and impose a 50% tariff on imports exceeding these limits.
• India successfully negotiated a carveout to protect its steel industry, ensuring continued market access despite the UK's new curbs.
• The agreement will provide duty-free access for a wide range of Indian exports to the UK, including textiles, leather, engineering goods, marine products, and processed foods.
• Tariffs on British whisky exports to India will be reduced from 150% to 40%, and duties on automobiles from 100% to 10% under a quota system.
• India has strategically protected sensitive domestic sectors such as dairy products, cereals, millets, edible oils, and apples from tariff liberalization.
• The DCC will exempt Indian workers and employers from making dual social security contributions in the UK during temporary assignments, with the exemption period extended from 3 to 5 years.

Key Concepts Involved:

• Comprehensive Economic and Trade Agreement (CETA): A broad trade pact aiming to reduce tariffs, enhance market access, and foster economic cooperation between two countries.
• Country-Specific Quota (CSQ): A designated volume of imports for a specific product that a particular country can export to another at a reduced or zero tariff rate.
• Authorised Use Scheme (AUS): A customs procedure allowing traders to import certain goods at a reduced or zero rate of duty if used for a specific, authorized purpose.
• Double Contribution Convention (DCC): An agreement designed to prevent individuals from having to pay social security contributions in two countries simultaneously.