India-UK free trade pact likely to be implemented in April: Official

The long-awaited India-UK Free Trade Agreement (FTA), officially known as the Comprehensive Economic and Trade Agreement (CETA), is expected to be operational by April 2026. This landmark deal, signed in July last year, marks a significant shift in the economic relationship between the world's fifth and sixth largest economies.

Key Benefits for Indian Exports

Under the terms of the CETA pact, approximately 99% of Indian exports will enter the British market with zero duty. This move is set to provide a massive boost to several labor-intensive sectors in India, including:

Textiles and Footwear

Gems and Jewellery

Sports Goods and Toys

Major Tariff Cuts on British Goods

In exchange for enhanced market access, India will significantly reduce import duties on iconic British products. Specifically, the tariff on Scotch whisky will see an immediate drop from 150% to 75%, with a long-term goal of reaching 40% by 2035.

Furthermore, the automobile industry will benefit from a transition where import duties on cars will be slashed

to 10% over the next five years, down from the current peak of 110%.

The Double Contributions Convention (DCC)

Alongside the trade pact, both nations have moved forward with the Double Contributions Convention. This agreement ensures that temporary workers moving between India and the UK will no longer be burdened by duplicate social security levies, making it easier for professionals to operate across borders.

Timeline for Ratification and Final Approval

While the Indian Union Cabinet handles domestic approval, the pact is currently undergoing a rigorous ratification process in the UK Parliament.

This includes detailed reviews by committees in both the House of Commons and the House of Lords. Following these legislative debates, a mutually agreed implementation date—likely in April—will be finalized.

Strategic Goals for 2030

The ultimate objective of the India-UK CETA is to double the bilateral trade volume, which currently stands at approximately USD 56 billion, by the end of the decade. By opening doors for UK businesses in India and providing a platform for Indian electric and hybrid vehicles in Britain, the pact sets a foundation for a modern, high-growth economic partnership.

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Content Source: Economic Times

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