Key Highlights:
- India-UK FTA (CETA) aims to double bilateral trade to $100 billion by 2030.
-Indian exports like textiles, leather, and jewellery will get duty-free access in the UK.
- UK goods like Scotch whisky and cars will become cheaper in India due to reduced tariffs.
New Delhi: India has signed a new trade agreement with the United Kingdom on Thursday. This is India’s 16th Free Trade Agreement (FTA) and is officially called the Comprehensive Economic and Trade Agreement (CETA).
This deal is expected to boost exports, bring more foreign investment, and reduce import duties on several products traded between the two countries.
The government wants to increase trade with the UK from around $56 billion to USD 100 billion by 2030.
What is a Free Trade Agreement (FTA)?
An FTA is a deal between countries where they agree to reduce or remove import duties on most goods and also make trade in services and investments easier.
This helps in:
- Making exports cheaper and more competitive
- Giving better market access
- Attracting investment
- Supporting local industries
- Giving more choices to consumers
- More than 350 FTAs exist worldwide today.
Countries India has FTAs with
India has already signed FTAs with countries and regions such as:
- Sri Lanka, Bhutan, Thailand, Singapore, Malaysia
- South Korea, Japan, Australia
- UAE, Mauritius
- ASEAN (10 Southeast Asian nations)
- EFTA (Iceland, Norway, Switzerland, Liechtenstein)
- Since 2014, India has signed five major FTAs — with Mauritius, UAE, Australia, EFTA, and now the UK.
- India is still negotiating new FTAs with the US, Oman, the European Union, Peru, and Israel. Talks with Canada are paused due to political reasons.
Big gains for Indian exports
Under the India-UK agreement:
- Indian labour-intensive sectors like textiles, clothing, leather, footwear, furniture, gems & jewellery, and sports goods will get zero-duty access in the UK.
- Indian processed foods, marine products, vegetable oils, and chemicals will also get easier market access.
- This is great news for small businesses and job-creating industries in India.
UK imports to become cheaper in India
The UK will also benefit under this FTA:
India will reduce import duties on Scotch whisky and gin from the current 150% to 75 percent, and then to 40 percent by year 10.
Import tax on British cars will be cut from over 100 percent to just 10 percent, but under set limits (quotas).
Why this deal matters
This agreement helps both countries by creating new trade opportunities. It also supports India's strategy to sign modern FTAs that promote manufacturing, services exports, and stronger global trade links.
The India-UK FTA is expected to give a big push to Indian businesses and make foreign goods more affordable for consumers.
(With PTI Inputs)
