Source Credit : Portfolio Prints
Historic Signing
On 24 July 2025, Indian Prime Minister Narendra Modi and UK Prime Minister Keir Starmer signed a landmark Comprehensive Economic and Trade Agreement (CETA) at Chequers in the presence of senior ministers from both nations. The deal was officially agreed in principle on 6 May 2025 and marks India’s first major FTA with a European nation since Brexit.
Major Benefits & Provisions
Tariff Reductions
- UK exports to India will see average tariffs shrink from ~15% to just 3%, making British whisky, cars, cosmetics, and electronics much cheaper for Indian consumers.
- Tariffs on Scotch whisky will be halved from ~150% to ~75% at the outset, then phased down to ~40% over a decade. Duties on automobiles will fall from over 100% to 10% within a specified quota period.
Trade Boost for India
Around 99% of Indian exports—spanning textiles, engineering goods, pharma, chemicals, leather, gems and jewellery, seafood, agro‑products, and auto-components—will receive zero‑duty access to the UK market, unlocking new export opportunities. Trade is projected to double to US $120 billion by 2030, supported by deeper services and investment ties.
Services & Mobility
The FTA includes provisions for regulated mobility—granting 1,800 annual temporary visa slots for professionals like yoga instructors, classical musicians, and chefs—and a double social security contribution agreement, exempting short-term workers from paying social security twice.
Regulatory Cooperation & Procurement
The agreement streamlines customs and technical approvals, commits to faster customs clearance, and improves access in government procurement for both UK and Indian firms.
Economic Impact & Political Significance
- The UK government estimates the FTA will add £4.8 billion annually to UK GDP (≈ 0.13%) and about ₹5.1 billion (≈ 0.06%) to India’s long‑run GDP.
- The UK expects to increase exports to India by 60% by 2040, while India anticipates a major uplift in exports across multiple sectors.
Senior leaders emphasized the strategic importance of the deal—UK’s biggest post-Brexit trade agreement, and India’s first major FTA with an advanced European economy, setting a template for future pacts, including those under negotiation with the EU and possibly the US.
Watchpoints & Limitations
Some critics note that the FTA lacks binding provisions on labor rights, environmental standards, and public health protections. In addition, services and professional mobility benefits remain somewhat limited, especially for larger visa categories like IT professionals.
Meanwhile, tariff reductions for UK cars will apply only to select high-end models and within strict quota limits, restricting broader access for mass-market vehicles.
Summary Table
| Feature |
Key Details |
| Signed on |
24 July 2025 |
| Tariffs on UK imports |
From ~15% → ~3%; whisky duties halved, auto duties to 10% under quota |
| Duty-free exports |
99% of Indian export lines to UK |
| Trade growth target |
US$120bn bilateral trade by 2030 |
| GDP impact |
~£4.8bn boost to UK; ~₹5.1bn to India |
| Services & visas |
Limited mobility: 1,800 slots/year |
| Strategic gain |
UK’s largest post-Brexit FTA; India’s first with major European economy |
This historic FTA marks a pivotal expansion of India–UK economic ties, opening doors in goods, services, and investment across strategic sectors. While some implementation details and safeguards are still under scrutiny, the deal is widely recognized as a major milestone in global trade, especially in the post‑Brexit world.
