India-UK CETA is India's most aspirational trade agreement to date: Trade Secretary

Calling the India-UK Comprehensive Economic and Trade Agreement (CETA) the country's "most aspirational" trade pact till date, Commerce Secretary Rajesh Agarwal on Tuesday said the agreement establishes a future-oriented economic architecture between two major economies and is one of India's most ambitious free trade agreements.

The CETA, which comes into force on Wednesday, covers 30 chapters spanning trade in goods and services, digital trade, government procurement, MSMEs, innovation, labour, environment and gender. "We call it a gold-standard and first-of-its-kind FTA because of its wide sectoral coverage and deep reduction in both tariff and non-tariff barriers," Agarwal said during a curtain-raiser briefing.

According to India's Commerce Ministry, the UK has offered tariff liberalisation on 98.8% of tariff lines, covering 99.5% of the value of Indian exports. Of this, 97.7% of trade value will become immediately duty-free, while 0.5% of trade value has been excluded from tariff liberalisation. India's offer covers 89.5% of tariff lines and 89.4% of trade value, with immediate tariff elimination on 30.3% of trade value, while the remaining tariff reductions will be phased over time.

The ministry said the agreement will provide duty-free access for several Indian export sectors. Existing UK duties of up to 12% on textiles and clothing, 16% on leather and footwear, 4% on gems and jewellery, 8% on organic chemicals, 4% on inorganic chemicals, 18% on auto parts, 8% on mechanical machinery, 14% on electrical machinery, 6% on plastics and rubber, 6% on surgical instruments, 10% on aluminium and 4% on copper will be reduced to zero under the agreement.

Among India's major exports to the UK are electrical machinery ($2.13 billion), textiles and clothing ($1.94 billion), mechanical machinery ($1.34 billion), gems and jewellery ($1.03 billion), plastics and rubber ($0.57 billion), organic chemicals ($0.56 billion), iron and steel ($0.44 billion), and pharmaceutical products ($0.41 billion).

Agarwal said the Double Contribution Convention (DCC) on social security will exempt eligible Indian professionals and their employers from making social security contributions in the UK during eligible temporary assignments. The Commerce Ministry said the provision is expected to benefit over 75,000 Indian workers and more than 900 employers.

The FTA also provides for self-certification of origin. Agarwal said the agreement includes provisions for farmers, fishermen, workers, women entrepreneurs, youth, startups and MSMEs, while also providing enhanced mobility commitments for professionals.

According to the Commerce Ministry, bilateral goods trade stood at $25.12 billion in FY26, with India's exports at $13.44 billion and imports at $11.68 billion. Bilateral services trade stood at $35.44 billion in 2024, with India's services exports at $21.66 billion and imports at $13.78 billion.

Agarwal said the government's focus on Wednesday would be on ensuring that consignments are dispatched under the FTA so that exporters begin availing preferential tariff since day 1.