New Delhi, India – During Prime Minister Narendra Modi’s visit to the UK On Thursday, India and the UK officially signed a huge Free Trade Agreement (FTA) called the Comprehensive Economic and Trade Agreement (CETA). This historic accord is expected to greatly increase trade between the two countries. By 2030, it is expected that trade will double from its present level of $56 billion.
The deal is a strategic triumph for both countries. London will let Indian professionals to move around for work, and New Delhi will lower tariffs on British cars and food. India has kept its delicate industries safe, such dairy, apples, and edible oils, by putting them on a negative list. This protects the interests of indigenous producers.
Important Points of the CETA Deal
The CETA will get rid of tariffs on almost 99% of tariff lines, which will cover almost all of the trade value. The UK will be able to bring in 90% of its goods from India without paying any taxes. This includes 92% of the goods it already brings in from India.
“We are dedicated to building a strong, high-scoring partnership,” said Prime Minister Narendra Modi following the signing ceremony in London, where he was there to support the historic pact. UK Prime Minister Keir Starmer said, “A landmark deal with India means jobs, investment, and growth here in the UK,” echoing what he said.
Strengthening Services and Safeguarding Farming
Business mobility was one of the most important issues for the UK during discussions, whereas automobiles, dairy, and agriculture were the most important issues for India. Officials say that making it easier for businesses to move around will be a big advantage for India. It will assist expand its services trade in one of Europe’s biggest marketplaces. India already has duty-free access to over 60% of its goods exports to the UK. The FTA’s main goal was to make it easier for services exports to get to the UK.
The FTA makes it easier for British agri-food commodities, like drinks, to get into India, but India has been able to protect its sensitive agricultural industries. An official said, “The agreement fully considers the needs of Indian farmers who grow sensitive crops like dairy, vegetables, apples, edible oils, oats, and so on by keeping those tariff lines on the sensitive list.”
Mobility Rules for Indian Workers
India has successfully gotten important mobility protections for its skilled workers under the new deal. This includes yoga teachers, cooks, investors, and those who give services on a contract basis. The UK has made it clear that this kind of travel is just “temporary” and meant to provide services, not to move people to the UK.
The UK has set a limit of 1,800 each year for qualified Indian traditional cooks, yoga instructors, and classical musicians who want to come to the UK as contractual service providers. Under this agreement, people can come and go as they want for up to 12 months in each 24-month period, or for the length of the contract, whichever is shorter.
Both parties have also agreed to allow more business travel, which means that people can go to the UK and India for short business trips. The UK government said that this makes sure that UK businesses and experts may still do business in India. They gave examples of how UK enterprises could now have the chance to provide services in India in fields like engineering and accounting.
A Good Thing for Both Economies
In a post on X, Union Commerce Minister Piyush Goyal praised the deal and congratulated Prime Ministers Modi and Starmer and the people of both countries. He stressed how much India would gain:
Duty-free access for almost 99% of Indian exports, which opens up around $23 billion in prospects for sectors that need a lot of workers. This marks a “new era for inclusive and gender-equitable growth.”
People who work with textiles, leather, shoes, gems and jewelry, toys, and marine items, as well as artisans and weavers, are expected to “step into a new phase of prosperity.”
The arrangement is a “historic leap for women” since it gives them better access to money and makes them more a part of global value chains.
Farmers will profit from duty-free exports on about 95% of agricultural goods, and fisherfolk will benefit from zero duty on 99% of marine exports, which will greatly increase their incomes.
Engineering goods, electronics, pharmaceuticals, chemicals, food processing, and plastics are all areas that rely heavily on manufacturing and will witness a “transformative impact.”
Indian shoppers would be able to get wonderful things at good prices.
India’s IT, services, and education sectors will profit from better access to the UK’s high-value markets.
The Double Contribution Convention’s three-year exemption from social security obligations in the UK is a big step forward for Indian workers and employers.
The FTA will assist Indian startups grow around the world by giving UK customers, investors, and innovation hubs access to them.
Goyal ended by saying that this arrangement is a “win-win for ‘Make In India’ and ‘Vocal For Local,'” because it would create jobs, empower communities, and strengthen India’s position as a leader in strategic trade. It starts “a new era of economic cooperation that will strengthen our trade ties.”