The mega trade pact, officially known as the Comprehensive Economic and Trade Agreement (CETA), is being billed as one of the biggest trade deals of modern times and secures zero-duty market access for nearly 99 per cent of India‘s exports to the UK.
“It is a historical moment for the modern UK-India partnership as the trade deal has unlocked the combined economic might of two global economic powerhouses,” Cameron told a group of journalists.
The deal is going to increase India’s and the UK’s GDP by nearly five billion pounds and will also increase bilateral trade by over 25 billion pounds every year in the long run, she said.
The coming into force of the CETA assumed greater significance in view of a fractured global trade environment largely triggered by US President Donald Trump‘s policies on trade and the lingering conflict in West Asia.
The trade deal, firmed up in July last year after three years of negotiations, will provide for comprehensive market access for Indian goods across all sectors and India will gain from tariff elimination on about 99 per cent of tariff lines (product categories) covering almost 100 per cent of the trade values, according to officials.
It will facilitate slashing tariffs on British whisky and cars among other items and is set to double bilateral trade by 2030. The trade deal is expected to help the Indian economy in sectors like textiles, leather, gems and jewellery, engineering goods, marine products, chemicals and processed foods.”It is a really exciting day, a historical moment for the modern UK-India partnership. We’ve boosted our bilateral trading relationship, which is already worth 48 billion pounds, basically making day-to-day trade cheaper, quicker and easier for the UK and India,” Cameron said.
“Together we’ve really unlocked the combined economic might of two global economic powerhouses. India, of course, one of the fastest-growing economies in the G20, a fountain of talent, technology and innovation, and the UK is home to global hubs in finance and international investment, and the lowest corporation tax in the G7 grouping,” she said.
A bilateral social security agreement too has been operationalised along with the trade deal.
Cameron said the UK-India trade is set for an immediate boost as consumers will now be able to enjoy cheaper, quicker, and easier access to the best of British and Indian products and services across both countries.
“From today, our economies, our businesses, and most importantly, our people are going to start seeing the benefits of this great deal.
“Ninety-nine per cent of Indian goods and 90 per cent of UK products entering the country duty-free, or reduced in tariffs.”
“The UK-India FTA is the new gold standard of trade deals — pro-worker, pro-innovation and pro-growth. It’s a force multiplier and a template for future trade deals,” the high commissioner said.
“It is also the biggest, and the most ambitious, modern free trade agreement to enter into force to date for both of our countries.”
To celebrate the implementation of the pact, a special package of select British goods arrived at the British mission in Mumbai this morning aboard a British Airways flight.
The package contained goods from the UK benefiting from reduced tariffs, including cosmetics, food products, and alcoholic beverages. The British high commissioner said the pact sends a message to the rest of the world that the rules-based order works.
“The UK-India trade deal brings sweeping benefits for a wide range of sectors. From today, import duty on Scotch whisky has been cut from 150 per cent to 75 per cent which should make a really significant difference to the price the consumer pays,” she said.
“The FTA is also the biggest and the most ambitious modern free trade agreement to enter into force to date for both of our countries. It’s the quickest turnaround for the UK bringing a new deal into force,” she noted.
Cameron also said that the import duties on premium UK-built cars will also begin to fall from over 110 per cent to 10 per cent, making iconic British cars cheaper for Indian consumers.
The envoy said the trade deal brings really sweeping benefits for a wide range of sectors.
“From today, and I think you’re probably all aware that import duties on Scotch whisky have been cut from 150 per cent to 75 per cent which should make a really significant difference to the price from zero base.”
“So, for example, if you had a Rs 5000 bottle of whisky that you were going to sell in India, because of tariffs, you tend to sell it for Rs 12,500 yesterday. But today you just have to sell it for Rs 8500, and soon for just Rs 7000,” Cameron added.
“And of course, from today, import duties on premium UK-built cars begin to fall from over 110 per cent to 10 per cent under a new quota, making iconic British brands cheaper for Indian consumers,” she said.
The India-UK bilateral trade crossed USD 55 billion in 2023-24. The UK is the sixth largest investor in India, with a cumulative investment of USD 36 billion.
India’s investments in the UK are close to USD 20 billion, and some 1,000 Indian companies operating in Britain provide employment to almost 100,000 people.
“This is a watershed moment for the UK-India partnership. As the landmark trade deal comes into force, what better than having select British products arriving in one of the very first UK flights into India this morning – with thanks to support from British Airways,” the UK’s Trade Commissioner for South Asia Harjinder Kang said in Mumbai.
“Our landmark trade deal is designed to benefit businesses and consumers from day one with cheaper, quicker and easier trade. We are all excited to take full advantage of it.”
David Wright, British Airways’ General Manager in India, said: “India is one of British Airways’ most important markets and we have a long history of connecting people, businesses, and cultures across the UK and India.”
“With 63 flights each week going up to 70 by the end of summer, we play an important role in strengthening economic and cultural ties between our two countries.”
Wright said the UK-India free trade agreement marks a significant milestone in the bilateral relationship and reinforces the long-term potential of one of the world’s most dynamic international corridors.
“We are proud to support this landmark agreement and the opportunities it will create for trade, investment and tourism.”
In her remarks, Cameron said the trade pact also pairs British firms in design, sustainability and innovation with India’s scale, ambition and pace of delivery.
“It’s a deal agreed in a spirit of fairness and really sensitive to each other’s interests and concerns, but actually a massive win for both of our economies. So now our emphasis turns to seeing how the FTA actually delivers benefits.”