India-UK CETA slashes duties, saves Indian firms $600 million from July 15
GS2Polity · Governance · IR· India's bilateral relations· Prelims + Mains·
Why in news
The India-UK Comprehensive Economic and Trade Agreement (CETA) is set to take effect on July 15, 2025, aimed at expanding bilateral trade to $100 billion by 2030.
Background
The CETA was signed in London on July 24, 2025, by PM Narendra Modi and PM Keir Starmer. It provides zero-duty access for Indian textiles, leather, gems, plastics, and silver into the UK, while exempting Indian firms from UK social security contributions for five years.
Facts for Prelims
- FactTarget bilateral trade volume: $100 billion by 2030.
- FactCurrent bilateral trade volume: $55-60 billion.
- FactSocial security contribution exemption: Valid for up to five years from July 15, 2025.
- FactZero-duty sectors: Textiles, leather, gems, plastics, and silver.
- FactProtected sectors: Internal Combustion Engine (ICE) vehicles.
For Mains
Q. Examine how the India-UK CETA can serve as a catalyst for India's manufacturing ambitions while addressing the challenges of protecting sensitive domestic industries.
Dimensions to cover in your answer
- Trade imbalance: Managing the influx of UK high-value goods against Indian labor-intensive exports
- Regulatory alignment: Harmonizing digital trade standards and SME participation across divergent legal frameworks
- Fiscal protection: Balancing zero-duty incentives for gems/textiles with the preservation of domestic automotive manufacturing
Keywords: Trade Liberalization · Bilateralism · Market Access · SME Integration · Economic Diplomacy
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