CETA Agreement 2025: India–UK Free Trade Deal Boosts Exports, Jobs, and Strategic Ties

Context

India and the U.K. signed a landmark CETA and unveiled the India–U.K. Vision 2035 to deepen strategic cooperation across trade, defence, technology, climate, and education, aiming for shared growth, clean energy, and global leadership rooted in democratic values.

India–UK Free Trade Agreement 2025

●       Market Access & Tariff Reductions

• 99% of Indian exports to the UK will now be duty-free.
• The UK will reduce tariffs on 90% of its tariff lines, with 85% becoming zero-duty within 10 years.
• Major gains for labour-intensive sectors: marine, textiles, chemicals, processed foods, and base metals.
• Processed food tariffs cut from 70% to 0%.

●       Agriculture & Rural Economy

• Over 95% of agricultural items gain zero-duty access.
• Boost for exports of: fruits, vegetables, pulses, spices, millets, jackfruit, organic herbs.
• Projected 20% growth in agri-exports over 3 years.
• Sensitive items like dairy, apples, oats, and edible oils are excluded from the deal.

●       Marine Sector Opportunities

• Zero tariffs on key products: shrimp, tuna, fishmeal.
• India’s current UK share is just 25% — strong growth expected.
• Significant boost for India’s coastal economies.

●       Textiles & Apparel

• 1,143 textile categories get full duty-free access.
• Competitive edge gained over Bangladesh and Cambodia.
• Focus on: ready-made garments, carpets, handicrafts, home textiles.
• Potential 5% increase in UK market share.

●       Engineering & Industrial Goods

• India’s engineering exports to UK may double to $7.5B by 2030.
• Tariffs up to 18% eliminated.
• Currently, India exports $4.28B; UK imports $193.5B globally — large scope.

●       Pharmaceuticals & Medical Devices

• Tariff-free access for generic drugs and devices.
• UK pharma imports: $30B, but India only supplies $1B.
• Target products: X-ray machines, ECGs, surgical instruments.

●       Chemicals & Plastics

• Chemical exports expected to grow 30–40% to $650–750M in FY26.
• Plastics (films, kitchenware) to see 15% export growth.
• Competitive pricing boost.

●       Toys, Sports Goods, Gems & Jewellery

• Toys and sports goods gain edge over China and Vietnam.
• Jewellery exports may double in 2–3 years, targeting the UK’s $3B market.

●       Leather & Footwear

• 16% tariff removed on leather goods and shoes.
• Export target: $900M+, benefitting MSME hubs like Agra, Kanpur, Kolhapur, Chennai.

●       Services & Labour Mobility

• 75,000 Indian workers exempted from UK social security for 3 years.
• 36 service sectors opened with no Economic Needs Test (ENT).
• Indian professionals can work in 35 UK sectors for 2 years.
• 1,800 chefs, yoga trainers, and artists to be allowed annually.

Impact & Strategic Gains

●       Sectoral Benefits

• Boost for India’s key exports: agriculture, processed food, textiles, seafood, gems, jewellery, engineering.
• UK exporters gain easier access to Indian markets for whisky, automobiles, electricals.

●       Trade Growth Projections

• UK exports to India may rise 60%, adding £15.7B by 2040.
• Total bilateral trade to grow 39%, adding £25.5B annually.

●       Strategic Reorientation Post-RCEP

• After exiting RCEP (2019), India shifted focus to Western economies.
• This deal shows India’s readiness for high-standard trade partnerships.

India’s FTA With Other Countries

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