India–UK sign Comprehensive Economic and Trade Agreement (CETA)

Syllabus: Bilateral Relations

Source:  PIB

Context: India and the United Kingdom signed a historic Comprehensive Economic and Trade Agreement (CETA) and endorsed a long-term strategic blueprint titled India–UK Vision 2035, aimed at strengthening bilateral relations across trade, defence, technology, education, and climate action.

About India–UK sign Comprehensive Economic and Trade Agreement (CETA):

What is the India–UK CETA?

• A Free Trade Agreement (FTA) granting zero-duty access on 99% tariff lines for Indian exports to the UK.
• Covers goods, services, mobility, investment, and social security exemptions under the Double Contribution Convention (DCC).
• Designed to empower labour-intensive sectors, MSMEs, professionals, women, and youth.

Key Provisions of CETA:

1. Goods and Market Access:

• Zero-duty access for 99% of tariff lines covering 100% of India’s trade value with the UK.
• Major boost to textiles, gems & jewellery, leather, toys, marine products, and processed food (tariff cut from 70% to 0%).
• Sensitive sectors like dairy protected under exclusion lists.

2. Services and Mobility:

• Enhanced access for IT, financial, legal, education, architecture, and consulting services.
• Liberalised visa norms for Contractual Service Suppliers, Intra-Corporate Transferees, and Independent Professionals.
• Mutual recognition of professional qualifications in healthcare, engineering, etc.

3. Double Contribution Convention (DCC):

• Exemption from UK social security payments for Indian professionals for 3 years.
• Boosts take-home salary and competitiveness of Indian firms abroad.

4. Inclusive Growth Focus:

• Provisions targeting MSMEs, women entrepreneurs, artisans, farmers, youth.
• Access to UK’s $63.4 billion agricultural market for Indian products like spices, tea, coffee, fruits, meat, and dairy (excluding sensitive items).
• Dedicated SME contact points, digital trade facilitation, and paperless customs.

About India–UK Vision 2035:

India–UK Vision 2035 outlines a comprehensive strategic roadmap built on five pillars: Growth, Technology, Defence, Climate, and Education.

1. Growth and Jobs

• Doubling bilateral trade from $56 billion by 2030.
• Enhanced investment via BIT, UK-India Infrastructure Financing Bridge, and British International Investment (BII).
• Legal, financial, insurance and asset management sectors to gain from harmonised regulations.

2. Technology and Innovation

• Joint centre for AI, collaboration on 6G, semiconductors, biotech, and cybersecurity.
• India–UK Critical Minerals Guild for secure green tech supply chains.
• Boost to startups through catapults, incubators, and biofoundries.

3. Defence and Security

• 10-Year Defence Industrial Roadmap covering joint R&D in electric propulsion, underwater systems, and directed energy weapons.
• Elevated 2+2 dialogue, expanded military exercises, and counter-terror cooperation.
• UK’s logistic reliance on India in Indian Ocean Region (IOR).

4. Climate and Clean Energy

• Joint action on climate finance, carbon markets, offshore wind, and nuclear collaboration (SMRs).
• Support for ISA, OSOWOG, ZEVTC, and blue carbon research.
• Promotion of Net Zero Innovation Partnership and agroforestry under India-UK Forest Partnership.

5. Education and People-to-People Ties

• Opening of UK university campuses in India, dual degree programs.
• Green Skills Partnership to bridge climate-tech skill gaps.
• Implementation of Young Professionals Scheme and mutual recognition of qualifications.

Strategic Significance for India:

Conclusion:

India–UK CETA and Vision 2035 mark a watershed moment in bilateral ties—linking trade, mobility, innovation, and strategic collaboration into a unified framework. With inclusive growth, sustainability, and technological leadership at its core, this partnership is set to position India as a key global player in the 21st century.