India–UK CETA Explained: What the Landmark Trade Deal Means for Indian Businesses
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On 27 June 2025, Union Minister of Commerce and Industry Piyush Goyal launched a practical business guide in London to help Indian and British companies make the most of a major new trade deal — the India–UK Comprehensive Economic and Trade Agreement, or CETA. A trade agreement is essentially a formal arrangement between two countries to make it easier and cheaper to buy and sell goods and services across borders. CETA is the biggest such deal India has signed in recent years.
The agreement was formally signed by Goyal and UK Secretary of State for Business and Trade Jonathan Reynolds, in the presence of Prime Ministers Narendra Modi and Sir Keir Starmer. It covers trade in goods, services, and the movement of skilled professionals between the two countries.
To understand how we got here, it helps to go back to May 2021, when India and the UK announced an Enhanced Trade Partnership (ETP) — a stepping stone agreement that set a shared goal of doubling bilateral trade (the total value of goods and services exchanged between two countries) by 2030. At that point, bilateral trade stood at around USD 56 billion. Formal negotiations for a full Free Trade Agreement began in January 2022, but progress was slow and stretched across several changes of government in the UK.
Talks picked up again in January 2025. By April 2025, both sides announced that nearly all issues had been resolved, and on 6 May 2025, PM Modi declared negotiations successfully concluded. The deal is scheduled to come into force on 15 July 2025.
The most headline-grabbing benefit for India is market access: under CETA, 99% of India's exports to the UK — covering nearly the full value of what India sells there — will enter duty-free. Duties, also called tariffs, are taxes that a country charges on imported goods. Removing them makes Indian products cheaper and more competitive in British shops and supply chains.
The sectors set to gain the most are labour-intensive industries — those that employ large numbers of workers — such as textiles, leather, footwear, marine products, sports goods, toys, and gems and jewellery. Engineering goods, auto components, and organic chemicals are also expected to benefit. On the services side, India already exported over USD 19.8 billion worth of services to the UK in 2023, and CETA opens new pathways for skilled Indian professionals — including contractual service suppliers, intra-corporate transferees, and independent professionals — to work in the UK more easily.
To help businesses actually use the deal, FICCI (the Federation of Indian Chambers of Commerce and Industry, one of India's largest business lobby groups) and the UK India Business Council (UKIBC, an organisation that promotes trade between the two countries) organised the London event. At it, Goyal launched the UK–India CETA Business Utilisation Manual, a sector-wise practical guide developed jointly by the UKIBC and HSBC India (the Indian arm of global bank HSBC). The manual translates legal provisions into steps businesses can act on. Goyal called on companies to
Why it matters
leverage the full potential of this landmark agreement to deepen collaboration, boost trade and investment flows, and drive innovation across sectors.} One issue remains unresolved. India has indicated it may revisit some duty concessions — including those on Scotch Whisky, a major UK export — if concerns about UK-imposed limits on Indian steel exports are not addressed. This signals that while the deal is largely done, its smooth operation will depend on both sides following through on their commitments.
Test yourself
1. What does CETA stand for in the context of the India–UK trade deal?
2. Who signed the India–UK CETA on behalf of the United Kingdom?
3. What percentage of India's exports to the UK will receive duty-free market access under CETA?
4. When is the India–UK CETA scheduled to come into force?
5. What was the Enhanced Trade Partnership (ETP) signed in 2021 designed to do?
6. What is the current approximate value of bilateral trade between India and the UK?
7. Which organisations jointly developed the UK–India CETA Business Utilisation Manual?
8. Which of the following is a labour-intensive sector expected to benefit from CETA?
9. What is the one outstanding concern that could affect some of India's duty concessions under CETA?
10. Where was the UK–India CETA Business Utilisation Manual launched?
Your notes
Source: News On AIR