By Agneshwar Sen
The India-UK Comprehensive Economic and Trade Agreement (CETA) has officially come into force. Agneshwar Sen examines the deal’s market access gains, compliance requirements, services and investment dimensions, and strategic implications for India’s trade negotiations with other countries
l What are the most significant gains for India?
INDIA HAS SECURED zero-duty market access for nearly 99% of its exports, covering almost 100% of trade value, with duty-free entry for garments, footwear, marine products, gems and jewellery, engineering goods, and processed foods— goods that currently face import duties of 4–16% in the UK.
In return, India will reduce or eliminate tariffs on 90% of its own tariff lines, with 85% becoming fully duty-free over a decade. Textiles, leather, marine products, gems, engineering goods and auto components are tipped as the biggest gainers in India, while British whisky, autos, and machinery gain phased access to India.
The India–UK Comprehensive Economic and Trade Agreement (CETA) thus marks a pivotal moment in bilateral economic relations as also India’s free trade agreement (FTA) journey. This agreement with its comprehensive coverage of topics; combining broad tariff liberalisation with calibrated safeguards for sensitive sectors is a model of sorts for the country as it negotiates bilateral pacts with other parties.
l Impact on automobiles and alcoholic beverage segments
The tariff cuts, quotas, and phased market-opening commitments for sectors such as automobiles and alcoholic beverages balance India’s domestic interests with greater access for UK exports. Both sectors use long phase-ins and quotas rather than sudden opening of the market. For cars, duties fall from 110% to 10%, but only within tariff-rate quotas, and electric vehicles (EV) get no concession at all for the first five years, a deliberate shield for India’s domestic EV push. The ICE car quota starts small and rises to 37,000 units by year five, capping how fast imports can grow. Whisky sees a similar glide path, i.e., the 150% duty drops to 110% in year one, reaching 75% only by year ten, and that too only above a minimum import price that protects the lower priced mass-market segment in India.
l Rules of origin
RULES OF ORIGIN (RoO) exist so that only genuine India- or UK-made goods qualify, preventing third-country goods from being routed through either country after minor processing to claim the tariff cut. For cars specifically, the vehicle must be physically made in the UK — for instance, a Land Rover built in Slovakia would not qualify. Practically, importers will need a valid Certificate of Origin, and for autos a separate Tariff Rate Quota or TRQ certificate from the Directorate General of Foreign Trade, valid for 12 months and non-transferable. The agreement also offers self-certification of origin and a commitment to clear compliant goods within 48 hours. This is useful, but businesses still need robust documentation and data retention systems in place to avoid denial of preference at the border.
l How the pact goes beyond a tariff deal
CETA IS EXPLICITLY framed as more than a tariff deal, it’s 30 chapters spanning goods, services, investment, digital trade, financial services, intellectual property, government procurement, innovation, sustainability, and SME support. Notably, India has opened high-value central government procurement contracts in transport, green energy and infrastructure to UK bidders, albeit with a 20% local-content safeguard. The Double Contribution Convention exempts Indian workers on UK assignments from dual social-security payments, now extended from three to five years, plus an annual quota for up to 1,800 Indian chefs, yoga instructors and classical musicians, a genuinely novel mobility feature.
l Integrating with global supply chains
CETA IS MARKING a shift in India’s trade strategy from protecting domestic markets to pursuing deeper integration with major economies while selectively safeguarding sensitive sectors. The EV carve-out, phased auto/whisky quotas, and procurement safeguards show India isn’t opening up indiscriminately. It is trading calibrated access for calibrated gains. While more than half of India’s exports already enter the UK duty-free, this deal marks a binding commitment to retain it. This long-term assurance is important for building lasting relationships that businesses in the two countries can depend on.
l Lessons from the India–UK deal
CETA’S TEMPLATE — COMPREHENSIVE coverage of trade and non-trade topics; long staging periods, TRQs for the most sensitive lines, hard exclusions for a short list of products, and a parallel social-security instrument — looks reusable. Similar negotiations are underway with the EU and other partners, and CETA could become a template for future pacts. Given that a UK Parliament’s committee flagged long staging periods, complex RoO, and administrative burden as risks to actual uptake, especially for smaller firms, a key lesson for the EU talks is that head-line tariff numbers matter less than implementation clarity, procedural simplicity, quota administration, RoO specificity, and dispute-resolution mechanisms will determine whether preferences get used at all.
The writer is trade policy leader, EY India
