New Delhi: In a major step towards deepening bilateral economic ties, India and the United Kingdom signed the Comprehensive Economic and Trade Agreement (CETA), a free trade pact that promises to transform the trade landscape between the two nations.Â
The agreement was signed by India’s Commerce and Industry Minister Piyush Goyal and the UK Secretary of State for Business and Trade Jonathan Reynolds in the presence of Prime Ministers Narendra Modi and Keir Starmer.
Opening New Doors for Indian Exports
CETA provides duty-free access for 99 percent of Indian exports to the UK, covering nearly the entire trade basket. Sectors like textiles, leather, footwear, gems and jewelry, toys, and marine products are expected to gain immediate benefits. These industries, many of which are labour-intensive, are central to India’s export economy and job creation.
The agreement also boosts prospects for high-growth sectors such as engineering goods, auto components, and organic chemicals. This is expected to further push India’s ‘Make in India’ agenda, encouraging local manufacturing and value addition.
Benefits for the Services Sector
The services sector, a key pillar of India’s economy, will also benefit significantly. CETA enhances market access in areas such as IT and IT-enabled services, financial services, legal and professional services, digital trade, and education.
Simplified visa rules and expanded entry categories will make it easier for Indian professionals to work in the UK. Architects, engineers, chefs, yoga instructors, and musicians will be able to work on contractual assignments with fewer bureaucratic hurdles.
Double Contribution Convention- A Social Security ReliefÂ
A notable feature of the agreement is the Double Contribution Convention. It exempts Indian professionals and their employers from paying social security contributions in the UK for up to three years. This move reduces the financial burden on Indian companies operating in the UK and improves the competitiveness of Indian professionals.
Focus on Inclusivity and Innovation
CETA also focuses on making trade more inclusive. Women and youth entrepreneurs, MSMEs, farmers, fishermen, and startups will have new opportunities to integrate into global value chains. The agreement includes provisions that support innovation, sustainable practices, and the reduction of non-tariff barriers.
APAC News Analysis
CETA is both strategic and timely for India. It opens up larger access to the UK market, giving a major boost to Indian exports, especially in labour-intensive sectors like textiles, leather, and marine goods. This will directly support small businesses and create jobs in manufacturing hubs across the country.
The social security exemption will lower costs for Indian companies operating there, making Indian professionals more competitive.
By including provisions for MSMEs, women entrepreneurs, and startups, the agreement goes beyond trade numbers and supports broader economic inclusion.
Overall, CETA strengthens India’s global trade position, helps diversify its export markets, and brings long-term gains in employment, innovation, and economic resilience.
Currently valued at USD 56 billion, India-UK bilateral trade is expected to double by 2030 under CETA. The deal marks a major step forward in India’s engagement with developed economies and sets a new benchmark for future trade partnerships.
