The operationalisation of the India-UK Comprehensive Economic and Trade Agreement (CETA) from July 15 marks more than the implementation of another free trade pact.
It reflects a broader shift in India’s trade strategy—from protecting domestic markets to pursuing deeper economic integration with major global economies while selectively safeguarding sensitive sectors.
Signed after nearly four years of negotiations, the agreement is expected to reshape commercial ties between the world’s fifth and sixth largest economies by opening new opportunities in goods, services, investment and digital trade. If fully leveraged, industry estimates suggest bilateral trade could almost double from about USD 58 billion in 2025-26 to nearly USD 120 billion by 2030.
The immediate headline benefit is significant. Nearly 99 per cent of Indian exports, measured by tariff lines, will receive duty-free access to the UK market. Labour-intensive sectors such as textiles, garments, leather, footwear, carpets, marine products, processed food, engineering goods, chemicals, and gems and jewellery are expected to be among the biggest beneficiaries as tariffs ranging from 4 to 16 per cent disappear.
For Indian exporters, particularly small and medium enterprises, the agreement offers an opportunity to improve competitiveness in a developed market where price differences often determine market share. Industry bodies believe this could help integrate more Indian manufacturers into global value chains.
ASSOCHAM President Nirmal K. Minda described CETA as “a historic milestone in India’s FTA journey,” saying it brings together two of the world’s oldest democracies through a comprehensive economic partnership. He said the agreement would strengthen trade and investment by leveraging the complementary strengths of both economies and projected bilateral trade could nearly double over the coming years.
The agreement, however, goes well beyond tariff reductions.
Spread across 30 chapters, CETA covers digital trade, financial services, investment, intellectual property, labour standards, environmental commitments, government procurement and dispute settlement. This reflects India’s growing willingness to negotiate comprehensive trade agreements that extend into areas once considered politically sensitive.
Another notable feature is the inclusion of government procurement. Eligible British companies will gain treaty-backed access to roughly 40,000 procurement contracts issued by central government ministries in sectors such as transport, infrastructure and green energy. At the same time, India has retained safeguards through domestic value-addition requirements and supplier eligibility conditions.
The agreement also addresses services, an area of increasing importance for India. The proposed Double Contributions Convention would exempt Indian professionals temporarily working in the UK from paying social security contributions in both countries for up to five years, reducing costs for Indian firms with overseas employees.
The automobile sector illustrates the calibrated nature of the negotiations.
India has agreed to reduce import duties on fully built passenger vehicles manufactured in the UK from 110 per cent to 10 per cent under a phased quota system. Petrol and diesel vehicles will benefit immediately, while electric, hybrid and hydrogen-powered vehicles will receive preferential access only from the sixth year, giving Indian manufacturers time to prepare for increased competition.
Similarly, tariffs on premium British alcoholic beverages, including Scotch whisky, will fall gradually from 150 per cent to 75 per cent initially and eventually to 40 per cent over ten years.
At the same time, India has protected several politically and economically sensitive sectors. Products such as fresh apples, walnuts, smartphones, gold bars, whey products and blue-veined cheese remain outside tariff concessions, underlining New Delhi’s continued preference for selective liberalisation rather than across-the-board market opening.
Industry leaders see the agreement as an important boost for India’s export ambitions.
Mohit Singla, Chairman of the Trade Promotion Council of India, called the operationalisation of CETA “a historic milestone” for India’s export ecosystem. He said duty-free access for nearly all Indian exports would significantly improve competitiveness in sectors ranging from food processing and engineering to textiles and gems and jewellery, while the agreement’s provisions on services, digital trade and investment offer new opportunities for MSMEs to expand internationally.
Yet trade experts caution against assuming that lower tariffs alone will automatically translate into higher exports.
Ajay Srivastava, Founder of the Global Trade Research Initiative (GTRI), argues that the widely cited figure of 99 per cent duty-free access requires context. More than half of India’s exports to the UK were already entering duty-free before CETA, meaning the incremental gains will vary considerably across sectors.
He also points to continuing non-tariff barriers, including product standards, certification requirements and regulatory compliance, which many exporters will still have to navigate. Emerging British policies such as tighter steel safeguard measures and the proposed Carbon Border Adjustment Mechanism could further limit benefits for carbon-intensive Indian exports.
For India, therefore, the agreement’s success will depend less on the legal text than on implementation. Businesses will need to understand complex rules of origin, comply with higher regulatory standards and build the capacity to compete in a sophisticated market.
CETA also signals something larger about India’s evolving trade posture. After years of caution towards free trade agreements, New Delhi is increasingly pursuing market-opening deals while retaining policy space for sensitive domestic industries. Similar negotiations are underway with the European Union and other partners, suggesting CETA could become a template for future agreements.
The pact undoubtedly expands opportunities for exporters, investors and service providers on both sides. But whether it delivers its projected economic gains will ultimately depend on how effectively businesses—and governments—convert preferential access into sustained trade, investment and competitiveness.
