India, UK Sign Historic CETA Deal to Boost Trade During PM Modi Visit

India and the United Kingdom (UK) signed the historic Comprehensive Economic and Trade Agreement (CETA) at Chequers Estate, United Kingdom on 24 July 2025 during the visit of Prime Minister Narendra Modi. 

The agreement was signed by the Union Minister for Commerce and Industry, Piyush Goyal, and Jonathan Reynolds, Secretary of State for Business and Trade, United Kingdom.

The historic agreement was signed in the presence of Prime Minister Narendra Modi and the United Kingdom’s Prime Minister Keir Starmer.

The agreements were signed between the world's fifth-largest economy (India) and the sixth-largest (United Kingdom) after the successful conclusion of trade negotiations between the two countries on May 6, 2025.

Chequers Estate is the official country residence of the Prime Minister of the United Kingdom and is situated 50 km northwest of the country's capital, London.

Background to Trade Deal 

The India-United Kingdom trade negotiation was started during the  Boris Johnson government of the United Kingdom in 2020, after the United Kingdom withdrew from the European Union on 31 January 2020.

Both countries held 13 rounds of negotiations before they were suspended in 2024 due to the general elections in both countries.

The negotiation was restarted after Narendra Modi returned to power in 2024 and the Keir Starmer Labour Party government took office in the United Kingdom.

On 6 May 2025, both countries announced the successful conclusion of the trade negotiations.

When Will it be implemented 

The CETA needs to be ratified  by the Cabinet of the Government of India ,which it has already done  before the departure of Prime Minister Modi to the United Kingdom.

The United Kingdom Parliament has to ratify the CETA, and according to experts, it may take around one year before the process is complete.

After that, the CETA will come into force on a mutually decided date.

CETA and Trade Target  

Both the countries have set a target to increase the bilateral trade from the present $23.17 billion in 2024-25 billion to $120 billion by 2030.

Indian merchandise exports in 2024-25 were $14.55 billion, and imports from the United Kingdom were $8,607 billion.

India has consistently enjoyed a trade surplus with the United Kingdom, and it was $5.94 billion in 2024-25.

Features of the India-UK CETA 

The CETA will liberalise trade in goods and services and also include professional mobility ( Indian professionals working in the United Kingdom and vice versa).

• It reduces tariffs on 99% of Indian exports to the United Kingdom to zero per cent, and similarly, India will reduce tariffs on the United Kingdom’s goods from 15% to an average of 3%.
• India will reduce tariffs on the United Kingdom’s products, such as whisky, gin, soft drinks, cosmetics, lamb, and other farm goods.
• India will allow the import of some United Kingdom-made cars at just 10% duty from the earlier 100%.
• Both countries have also agreed to use digital systems and paperless trade to make customs clearance easier and the trade process simpler and quicker.

Benefits to India 

The Indian labour-intensive sectors, such as leather, textiles, footwear, sports goods, toys, marine products, and gems and jewellery, alongside fast-growing sectors like engineering goods, auto components, and organic chemicals, will have greater access to the United Kingdom’s market.

Agriculture Sector 

• Around 95% of Indian agricultural products, including basmati rice, spices, fresh grapes, bakery items, nuts, sauces, tea, coffee, and millets, will have access to the United Kingdom at a zero per cent rate. 
• It is expected to raise India’s agri-exports by over 20% over the next three years. 
• However, the dairy sectors, apples and oats have been excluded from tariff concessions.

Double Contribution Convention Agreement 

• A significant feature of the CETA is the Double Contribution Convention.
• It grants an exemption for Indian workers working in the United Kingdom and their employers from contributing to the United Kingdom’s social security system for three years.Similar benefits will be extended to the United Kingdom’s citizens in India.
• Earlier, they had to pay social security contributions in both countries.
• The agreement is expected to boost the income of the Indian workers and the company.

Participation in Government Contract 

• The Indian companies, in partnership with the local United Kingdom companies, can participate in the bidding process for government contracts in the United Kingdom. 
• Similarly, benefits will be available to the United Kingdom’s firms for Indian government contracts.