India and the United Kingdom have taken a major step in building a stronger economic partnership with the signing of the Comprehensive Economic and Trade Agreement (CETA). The agreement was signed by Commerce and Industry Minister Piyush Goyal and Secretary of State for Business and Trade, Jonathan Reynolds in the presence of the two Prime Ministers.
CETA secures unprecedented duty-free access for 99% of India’s exports to the UK, covering nearly the entire trade basket. This is expected to open new opportunities for labour-intensive industries such as textiles, marine products, leather, footwear, sports goods, toys, and gems and jewellery, alongside fast-growing sectors like engineering goods, auto components, and organic chemicals.
There will be no tariff on the export of gold-diamond jewellery, clothes and leather goods from India to Britain.
Britain will also cut import duty on Basmati rice, shrimp, spices and tea. This will enhance the access of Indian exporters to the British markets.
India is expecting a lot of benefits from this trade deal. India is expected to benefit in the areas related to toys and clothes. Exports are expected to get a boost in these sectors. This will provide a filip to employment. This is our biggest need.
However, it is too early to say how much India will benefit from this deal because now it has to be passed in the British Parliament. It is being opposed there. The opposition party there is opposing the deal. The condition of Britain's economy is not good. People are not buying goods there because they do not have money to buy things.
How services sector will benefit?
The services sector, a strong driver of India’s economy, will also see wide-ranging benefits. The agreement provides greater market access in IT and IT-enabled services, financial and legal services, professional and educational services, and digital trade.
Indian professionals, including those deployed by companies to work in UK across all services sectors, professionals deployed on contracts such as architects, engineers, chefs, yoga instructors, and musicians, will benefit from simplified visa procedures and liberalised entry categories, making it easier for talent to work in the UK.
India has also secured an agreement on the Double Contribution Convention. This will exempt Indian professionals and their employers from social security payments in the UK for up to three years, improving the cost competitiveness of Indian talent.
The agreement has been designed to make trade more inclusive. Women and youth entrepreneurs, farmers, fishermen, startups, and MSMEs will gain new access to global value chains, supported by provisions that encourage innovation, promote sustainable practices, and reduce non-tariff barriers.
This deal will benefit the service sector of both countries. Especially in the technology and finance sectors. This will ease trade and also reduce the cost of doing business. These agreements will increase investment in both countries and create new employment opportunities.
Prakash Kumar Pandey