India-U.K. CETA (International Relations)
India-U.K. CETA (International Relations)
Why In News:
The India-U.K. Comprehensive Economic and Trade Agreement (CETA) has come into effect today, described by both governments as a 'gold standard' Free Trade Agreement (FTA).
Source: The Hindu, Page 13, 15 July 2026 - 'Gold standard' India-U.K. trade deal is coming into effect today
What is CETA?
CETA is a comprehensive trade pact going beyond a standard FTA. Unlike a limited FTA that only reduces tariffs on goods, a CETA also covers services, investment, intellectual property, government procurement, and regulatory cooperation.
Key Features of the India-U.K. CETA
Tariff elimination: Nearly 99% of India's exports to the U.K. will eventually receive zero-duty access, while India will phase down tariffs on roughly 90% of tariff lines or trade value from the U.K. side over a transition period.
Sectoral gains for India: Labour-intensive sectors such as textiles, leather, footwear, gems and jewellery, marine products, and engineering goods are expected to benefit from duty-free access to the U.K. market.
Sectoral gains for the U.K.: Reduced tariffs on Scotch whisky, automobiles, and medical devices exported to India, sectors where the U.K. had long sought market access.
Double Contribution Convention (DCC): A parallel social security agreement exempts short-term Indian workers in the U.K. (and vice versa) from making double social security contributions, a long-standing demand of India's services industry.
Institutional mechanism: A Joint Committee co-chaired by both countries will oversee implementation, dispute settlement, and periodic review of the agreement.
Key Facts for Prelims
India currently has FTAs and CEPAs with ASEAN, Japan, South Korea, UAE, Australia, and Mauritius (CECPA); the U.K. deal is among the largest in terms of trade volume.
While FTAs mainly focus on reducing tariffs on goods, CEPAs are broader and also cover services, investment, and deeper economic cooperation.
The CETA agreement does not cover full labour mobility or data localisation norms, reflecting India's cautious approach on these sensitive issues.