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India–UK Comprehensive Economic Trade Agreement (CETA)

25 Jul 2025 GS 3 Economy
India–UK Comprehensive Economic Trade Agreement (CETA) Click to view full image

Context

  • Signed during PM Modi’s visit to the UK in July 2025.

  • Commerce Ministers Piyush Goyal (India) and Jonathan Reynolds (UK) signed the pact.

  • Replaces the earlier “Roadmap 2030” with the India–UK Vision 2035.

  • Described as UK’s “biggest trade deal since Brexit” and the “best deal India has ever offered anyone”.

Key Highlights of the Trade Deal

For India

  • Beneficiary Sectors:

    • Farmers

    • MSMEs

    • Footwear & jewellery exporters

    • Seafood & engineering goods

  • Tariff Reductions:

    • British medical devices and aerospace parts to face lower tariffs in India.

For the UK

  • Key Gains:

    • Greater access to Indian markets for:

      • Whisky (Scotland)

      • Advanced manufacturing

      • British services (London, Manchester, Leeds)

    • Lower prices in the UK for Indian:

      • Clothing

      • Food products

      • Footwear

Strategic and Economic Significance

Bilateral Impact

  • Deepens trade and economic integration.

  • Boosts jobs and growth in both economies.

  • Seen as a counterweight to rising trade protectionism globally.

Global Implications

  • Reflects India’s push for diversified trade relations post-RCEP exit.

  • Aligns with UK’s post-Brexit trade diversification goals.

  • Positions India as a credible economic partner in the West.

India–UK Vision 2035

Major Pillars

  1. Growth and Jobs

  2. Technology – including expansion of the Technology Security Initiative.

  3. Climate Cooperation

  4. Defence & Security

Institutional Mechanism

  • Annual review at the Foreign Minister level.

  • Regular interactions between the two Prime Ministers.

Additional Agreements

Double Contributions Convention (DCC)

  • Cross-border workers to pay social contributions in only one country (up to 3 years).

  • Replaces the earlier one-year exemption.

Multilateral Cooperation

  • Pledge to reform global institutions like:

    • United Nations (incl. support for India’s UNSC membership)

    • WTO

    • IMF & World Bank

    • WHO

    • Commonwealth

Security and Extradition Cooperation

  • Joint stand against terrorism – Modi thanked UK for support after Pahalgam attack (April 22).

  • Commitment to end double standards in counter-terrorism.

  • Enhanced cooperation on extradition of economic offenders.



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