India-UK 'Gold Standard' Trade Deal to Take Effect July 15, Covers 98% of Tariff Lines
The India-U.K. Comprehensive Economic and Trade Agreement (CETA) and the Double Contribution Convention (DCC) will come into force on July 15, Commerce Secretary Rajesh Agrawal announced on Tuesday. He described the pact as a 'gold standard' and one of the 'most ambitious and aspirational free trade agreements' India has signed.
Agrawal said the deal benefits Indian farmers, fisherfolk, workers, and women entrepreneurs. The agreement was signed in July last year and is now being implemented.
'This is one of the first free trade agreements of its kind, establishing a future-oriented economic architecture between two major economies,' Agrawal said at a press briefing. He highlighted the wide sectoral coverage and deep reductions in both tariff and non-tariff barriers.
Under the deal, the U.K. will immediately eliminate tariffs on 96.8% of its tariff lines, covering 97.7% of trade value. An additional 2% of tariff lines (1.8% of trade value) will see reduced tariffs based on quotas. Overall, this covers 98.8% of tariff lines and 99.5% of trade value.
India, in turn, will immediately eliminate tariffs on 30.3% of trade value, with 47% more phased out over time. It will also provide reduced quota-based tariffs on 12.1% of trade value. This covers 89.5% of tariff lines and 89.4% of trade value.
The deal spans 30 chapters, covering digital trade, government procurement, small and medium enterprises, innovation, labour, environment, and gender. It also addresses non-tariff barriers such as sanitary and phytosanitary measures and technical barriers to trade, ensuring they do not become unjustified restrictions.
Agrawal said India's sensitive sectors—dairy, cereals, pulses, vegetables, gold and jewellery, smartphones, and critical polymers—are protected.
The DCC is a 'gamechanger' for India's services sector and skilled workforce, Agrawal said. Indian employees and their employers currently contribute about 25% of salary to the U.K.'s national insurance system, but workers often cannot draw benefits. The DCC will ensure that workers paying social security in India will not have to pay double contributions in the U.K. for five years, benefiting over 75,000 Indian workers and 900 employers.
Chris Hayward, Policy Chairman of the City of London Corporation, welcomed the deal, noting it provides a platform for greater collaboration in financial services, insurance, fintech, sustainable finance, and infrastructure investment.
