India-UK trade agreement: 5 key tenets of the new deal

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The newly signed India-UK CETA offers unprecedented market access for Indian goods, aiming to double engineering exports to the UK by FY30. It supports MSMEs, enhances IT services, and facilitates talent flow, exempting Indian workers from UK social security contributions, thus improving take-home pay and reducing costs for Indian companies.
India-UK trade agreement: 5 key tenets of the new deal
Prime Minister Narendra Modi and UK Prime Minister Keir Starmer Credits: PM Modi's X Handle

India and the UK today signed the Comprehensive Economic and Trade Agreement (CETA) in the presence of Prime Minister Narendra Modi and UK Prime Minister Keir Starmer, with Commerce Minister Piyush Goyal and Secretary of State for Business and Trade, Jonathan Reynolds, serving as the signatories.

"India and the UK sign a Comprehensive Economic and Trade Agreement (CETA), advancing a new era of economic partnership and opportunity under the visionary leadership of PM," said Union Commerce Minister Piyush Goyal on X.

The deal brings in major advantages to the domestic manufacturing and labour-intensive sectors. The UK-India pact is expected to provide a major shot in the arm to India's engineering exports to UK. With 10 deals in place now, India's engineering exports to the UK may double to $7.5 billion by FY30. 

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Key tenets of the India-UK CETA:

1. Fillip to MSMEs: The agreement unlocks export opportunity for labour-intensive Sectors including textiles, leather, footwear, gems an jewellery, marine products, and toys—generating large-scale employment and empowering artisans, women-led enterprises, and MSMEs. 

2. Market access: The deal provides unprecedented market access for Indian goods with zero-duty access on 99% of tariff lines, covering nearly 100% of the trade value.

3. Boost to IT/ITES: A wide-ranging package covering IT/ITeS, financial and professional services, business consulting, education, telecom, architecture, and engineering—unlocking high-value opportunities and job creation have been provisioned in the deal. The deal will also result in enhanced global mobility for Indian professionals.

4. FTA to facilitate talent flow: Under the new trade deal, provisions have been made for streamlined pathways for contractual service suppliers, business visitors, intra-corporate transferees, and independent professionals (e.g., yoga instructors, chefs, and musicians), enabling smoother talent flow and cross-border collaboration.

5. Double contribution convention (DCC): It will exempt Indian workers and their employers from social security contributions in the UK for up to three years, significantly improving take-home pay and reducing costs for Indian companies.

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