India-UK CETA to boost bilateral trade to $100 billion by 2030; engineering, textiles among biggest gainers
New Delhi: India's Comprehensive Economic and Trade Agreement (Ceta) with the UK, which takes effect on Wednesday, is expected to propel bilateral trade to $100
New Delhi: India's Comprehensive Economic and Trade Agreement (Ceta) with the UK, which takes effect on Wednesday, is expected to propel bilateral trade to $100 billion by 2030, opening significant opportunities for exporters across engineering goods, textiles and apparel, leather, gems and jewellery, chemicals, marine products and services, the Union commerce ministry said. Describing it as one of India's most ambitious trade pacts, commerce secretary Rajesh Agrawal said the Ceta sets a "gold standard" owing to its broad sectoral coverage and deep commitments on tariff as well as non-tariff measures. Unlike conventional free trade agreements that primarily focus on tariff liberalization, the India-UK Ceta spans 30 chapters, covering areas such as digital trade, government procurement, innovation, labour, environment and gender, while maintaining safeguards for India's sensitive sectors. Also Read | What the India-UK trade pact means for film and OTT Under the agreement, Indian exporters will receive duty-free access for 99.5% of the value of India's exports to the UK, covering 98.8% of tariff lines, effectively eliminating duties across a wide range of labour-intensive and manufacturing sectors. India, in turn, has offered preferential market access covering 89.4% of the value of UK exports, with tariff reductions being phased in for sensitive products. The agreement is expected to substantially improve the competitiveness of Indian exports in one of the world's largest developed markets. Deeper economic engagement The commerce ministry expects the agreement to significantly deepen economic engagement between the world's fifth and sixth-largest economies. Merchandise trade between India and the UK stood at $25.12 billion in 2025-26, with India's exports at $13.44 billion and imports at $11.68 billion.
Bilateral services trade was valued at $35.44 billion in 2024, with India maintaining a services trade surplus of $7.88 billion. Engineering is expected to be one of the biggest beneficiaries of the agreement. The UK imports engineering goods worth nearly $193.5 billion annually, while India's exports to the market currently stand at about $4.28 billion, highlighting significant untapped potential. Duty elimination is expected to boost exports of automobiles, auto components, motorcycles, industrial machinery, iron and steel products, aluminium products and engineering equipment while strengthening participation of Indian manufacturers and MSMEs in global value chains. Manufacturing hubs across Tamil Nadu, Maharashtra, Gujarat, Karnataka, Uttar Pradesh and Telangana are expected to benefit. The textiles and clothing sector is also poised for a major boost. The agreement removes UK tariffs of up to 12% across 1,143 tariff lines, enhancing India's competitiveness against Bangladesh, China, Pakistan, Vietnam, Cambodia and Türkiye. The UK imports textiles and apparel worth around $28.8 billion annually, while India's exports remain relatively modest, leaving substantial room for expansion. Export-oriented clusters in Tiruppur, Surat, Ludhiana, Panipat, Bhadohi and Moradabad are expected to benefit. The agreement also provides immediate duty-free access for leather and footwear, gems and jewellery, chemicals, plastics, rubber products, electrical machinery, marine products and several agricultural exports. Leather and footwear exporters will benefit from the removal of tariffs of up to 16%, while marine exporters will gain from complete duty elimination in a UK seafood market valued at nearly $4.9 billion. The gems and jewellery industry will similarly benefit from the removal of duties of up to 4%, improving India's competitiveness in the UK's premium retail market.
The BriefWire