India and the United Kingdom have taken a landmark step in strengthening bilateral economic relations with the signing of the Comprehensive Economic and Trade Agreement (CETA) on July 24, 2025 in London. The agreement was signed by Union Commerce and Industry Minister Piyush Goyal and UK Secretary of State for Business and Trade Jonathan Reynolds, in the presence of Prime Minister Narendra Modi and UK Prime Minister Keir Starmer.
Highlights of the Agreement:
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99% Duty-Free Access
- Sectoral Benefits:
- Labour-intensive industries like textiles, leather, footwear, marine products, sports goods, toys, gems & jewellery.
- Fast-growing sectors like engineering goods, auto components, organic chemicals.
- Agricultural products such as turmeric, cardamom, pepper, mango pulp, pickles, pulses will now enjoy duty-free access.
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Tariff Reductions:
- UK whisky import tariffs to drop from 150% to 75% immediately, and eventually to 40% over 10 years.
- Automobile import duties from the UK to fall from 100% to 10% under quotas.
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Services Sector Gains: Simplified visa processes and liberalized entry categories for Indian professionals such as IT experts, architects, engineers, chefs, yoga instructors, musicians, and corporate transferees.
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Social Security Agreement: Eliminates double social security contributions for Indian professionals in the UK for up to three years.
Economic Impact
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Trade Expansion Goal: Bilateral trade to double to USD 120 billion by 2030, up from the current ~$60 billion.
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FY 2024–25 Trade Data:
- Indian exports to the UK rose by 12.6% to $14.6 billion.
- Imports from the UK increased 2.3% to $8.6 billion, making total trade worth $23.2 billion.
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The agreement is expected to boost exports, job creation, investment inflows, MSME growth, and farmer profitability.
Strategic Significance
This agreement reflects India’s growing role in the global economy and its strong engagement with major developed nations. By reducing tariffs and easing regulations, CETA opens new opportunities in both goods and services sectors, paving the way for a deeper, resilient, and mutually beneficial India–UK partnership.
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