India's Comprehensive Economic and Trade Agreement (CETA) with the UK took effect on Wednesday, aiming to increase bilateral trade to $100 billion by 2030. The agreement is expected to open significant opportunities for Indian exporters across various sectors, including engineering goods, textiles, and chemicals, according to the Union commerce ministry. Commerce Secretary Rajesh Agrawal described the CETA as one of India's most ambitious trade pacts, noting its broad sectoral coverage and deep commitments on tariff and non-tariff measures.
Key Details
Under the CETA, Indian exporters will receive duty-free access for 99.5% of the value of their exports to the UK, covering 98.8% of tariff lines. In return, India has offered preferential market access for 89.4% of the value of UK exports, with phased tariff reductions for sensitive products. The agreement is expected to enhance the competitiveness of Indian exports in one of the world's largest developed markets.
Background
Merchandise trade between India and the UK was valued at $25.12 billion in 2025-26, with India's exports at $13.44 billion and imports at $11.68 billion. Bilateral services trade reached $35.44 billion in 2024, with India maintaining a services trade surplus of $7.88 billion. The engineering sector is anticipated to be one of the biggest beneficiaries of the CETA, as the UK imports significant quantities of engineering goods.
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The CETA could positively influence sectors such as textiles and engineering by enhancing export opportunities for Indian companies. Increased trade may also affect currency valuations and contribute to economic growth in both countries. Investors will watch for potential shifts in trade dynamics and economic policies stemming from this agreement.