India–UK CETA: Anatomy of a Landmark Trade Deal

What the Deal Covers

• Tariff elimination on about 99 per cent of Indian tariff lines exported to the UK — textiles, leather, footwear, gems and jewellery, marine products, engineering goods.
• India cuts duties on 90 per cent of UK tariff lines; Scotch whisky tariffs fall from 150 to 75 per cent immediately and to 40 per cent over ten years.
• UK automobile tariffs drop from over 100 per cent to 10 per cent under a quota system.
• Services: commitments on IT, financial and professional services; mobility for contractual service suppliers, chefs, yoga instructors and musicians.
• Double Contribution Convention: Indian workers posted to the UK for up to three years are exempt from UK social security contributions.

Why It Matters

The UK is India's sixth-largest investor and bilateral trade stood near USD 55 billion in 2024. The CETA is India's most comprehensive FTA with a developed economy and a template for the pending EU deal, signalling New Delhi's shift from trade defensiveness to strategic market access.

• Sensitive sectors excluded: dairy, apples, cheese, edible oils and sugar remain protected on the Indian side.
• Government procurement opened for UK firms above a threshold — a first in India's FTA practice.
• The agreement includes chapters on labour, gender, anti-corruption and environment — 'new-generation' FTA features.

Assessment

Gains for labour-intensive exports are substantial, but competition in automobiles and spirits will test domestic producers. Implementation quality — rules of origin, conformity assessment and mobility processing — will determine whether the headline tariff cuts translate into real trade.