The India-UK Comprehensive Economic and Trade Agreement (CETA), one of India’s most ambitious bilateral trade agreements, goes into force on 15 July. The deal covers much more than tariff liberalization, representing a strategic partnership between two complementary economies that seek to build resilient supply chains, deepen technology collaboration, attract investment and create new opportunities for businesses.
It comes at a time when global trade is increasingly being shaped by geopolitical factors and supply chain realignments. Bilateral trade has reached nearly $56 billion and both countries aim to double it by 2030. The CETA provides the institutional framework to achieve this.
An Indian business delegation to London led by minister of commerce and industry Piyush Goyal recently engaged with policymakers, businesses, research institutions and investors in the UK. The message from every interaction was consistent: businesses in both countries view the CETA not merely as a trade agreement, but as a platform for long-term investment, innovation and industrial collaboration.
The UK imports nearly $947 billion worth of goods annually, yet India accounts for only 1.6% of this market. The CETA’s implementation creates an opportunity for Indian businesses to capture a larger share. Under it, the UK provides duty-free access to 99% of Indian exports. This immediately enhances the competitiveness of sectors such as textiles, apparel, leather, footwear, gems and jewellery, engineering goods, chemicals, marine products and auto components.
For many labour-intensive industries, especially those populated by micro, small and medium enterprises (MSMEs), this entails enormous benefits. Indian exports in some of these key sectors have faced very high tariffs in the UK market. These duties get eliminated now, giving Indian exporters a price advantage over competitors.
The CETA also creates enabling conditions to strengthen industrial partnerships. Advanced manufacturing is an important area for collaboration. India’s manufacturing scale, engineering talent and production-linked incentive ecosystem complement the UK’s strengths in precision engineering, advanced materials, electric mobility, battery technologies, industrial design and automation. There are opportunities in electric vehicle supply chains, robotics, industrial artificial intelligence (AI), aerospace components, among others.
Technology and innovation will equally define the future relationship. India’s leadership in digital public infrastructure, software engineering and global capability centres combines with the UK’s expertise in frontier research, AI, semiconductors, fintech and university-led innovation. As India becomes a major global destination for innovation-led GCCs, UK firms will expand their high-value operations well beyond traditional back-office functions.
Healthcare and life sciences will also benefit. India’s globally competitive pharmaceutical and vaccine manufacturing ecosystem complements the UK’s strengths in biotechnology, medical research and clinical innovation.
Further, India’s renewable energy expansion requires advanced technologies, long-term capital and sophisticated engineering solutions. The UK brings strengths in offshore wind, green finance, hydrogen technologies, grid modernization and climate innovation. The CETA provides confidence for greater investment in renewable energy, transmission infrastructure, energy storage and industrial decarbonization, while opening new avenues for technology partnerships.
The services chapter is also significant. The pact expands opportunities across information technology, professional services, education, engineering, financial services and consulting, among others. The accompanying Double Contribution Convention will exempt eligible Indian professionals and their employers from dual social security contributions, reducing costs and making cross-border deployment of skilled professionals significantly more competitive.
The biggest beneficiaries could ultimately be India’s MSMEs. Lower tariffs, simplified procedures and improved market access can help thousands of smaller businesses integrate into global value chains. With targeted awareness programmes, many first-time exporters will be able to leverage the UK market for premium products, e-commerce and niche manufacturing.
At the same time, government-industry collaboration must continue. Bilateral engagements also are needed for regulatory cooperation, mutual recognition of standards and professional qualifications, and talent mobility.
The CETA signals India’s growing confidence in engaging with the global economy through high-quality, mutually beneficial economic agreements. It also reinforces India’s emergence as a trusted manufacturing destination, an innovation partner and a reliable investment hub.
The ultimate gains will depend on how companies, investors and institutions seize this unprecedented opportunity to capitalize on one of the world’s most dynamic bilateral economic partnerships.
The author is president, Ficci.