Daily Briefing: Highlights of India-UK trade deal

Daily Briefing: Highlights of India-UK trade deal

Prime Minister Narendra Modi, who is visiting London, has signed the landmark free trade agreement with his British counterpart, Keir Starmer. The Comprehensive Economic and Trade Agreement (CETA) comes against growing volatility triggered by US President Donald Trump’s tariffs. The CETA promises to enhance bilateral trade, provide Indians with greater access to British products, ranging from cosmetics to cars, and allow for tariff-free access to 99% of Indian imports to the UK.

Here’s a look at some significant gains for India and the UK:

👉 The UK will eliminate import duties of up to 20% on job-creating sectors such as textiles, footwear, gems and jewellery.

Indian food sectors, including seafood, dairy, and meat, will enjoy zero duties. Tariffs on tea and coffee have also been scrapped.

👉 In a first, India has allowed UK firms to participate in government tenders, giving them Class Two status under ‘Make In India’ rules, which require 20-50% domestic value addition.

You may see more British luxury vehicles on the roads as the CETA slashes duties on internal combustion engine cars to 30-50%. However, the benefit will be quota-based and apply to a limited number of vehicles. The duties will be further reduced gradually over the years. Zero-emission cars will also see reduced tariffs, depending on their cost, benefiting automakers like Jaguar Land Rover, a manufacturer of SUVs.

👉 Lastly, the UK and India have also agreed to ease the exchange of services. They will now require temporary employees to pay social security contributions only in their home countries, which would mean greater take-home salaries.