India-UK CETA Comes Into Force, Grants Duty-Free Access To 98% Of Indian Exports

New Delhi, Jul 15 (KNN) India's Comprehensive Economic and Trade Agreement (CETA) with the United Kingdom will come into force on July 15, providing duty-free access to 98 percent of Indian goods exported to the UK and marking a major milestone in bilateral trade relations.

Duty-Free Access For Majority Of Indian Exports

The preferential tariff benefits will apply not only to fresh exports but also to consignments already in transit and shipments that have reached UK ports but are awaiting customs clearance.

The UK imports goods worth around USD 949 billion annually, of which India's share is currently USD 13.44 billion. The agreement is expected to improve the competitiveness of Indian products and expand the country's presence in the British market.

Services Trade And Professionals To Benefit

CETA also covers trade in services. The UK imports services worth approximately USD 399 billion each year, with India's current share estimated at USD 21.66 billion.

The agreement is also expected to benefit Indian professionals working in the UK. From July 15, around 75,000 employees of Indian companies posted in the UK will be exempt from contributing to the British social security system under the agreed framework. 

Currently, such employees contribute nearly 23 percent of their salary towards social security, contributions that are generally non-refundable for those working in the UK for less than 10 years.

UK Exports To India To See Tariff Cuts

On the import side, the agreement will provide UK exporters with improved access to the Indian market through phased tariff reductions on products such as automobiles, alcoholic beverages, chocolates, silver, cosmetics and medical devices. 

Electric vehicles manufactured in the UK will become eligible for concessional tariffs in India after five years.

Trade Expected To Double By 2030

Commerce Secretary Rajesh Agrawal said bilateral trade in goods and services currently stands at USD 55-60 billion annually, with both countries aiming to increase it to USD 100 billion by 2030.

He said the agreement is expected to boost exports from labour-intensive sectors such as textiles, leather, footwear, gems and jewellery, and engineering goods, generating additional employment opportunities in India.

Industry Sees Export Opportunities

Mohit Singla, Chairman, Trade Promotion Council of India (TPCI), said the removal of UK import duties on several agricultural and processed food products would create new export opportunities for Indian farmers while also benefiting micro, small and medium enterprises (MSMEs).

Ajay Sahai, Director General and CEO, Federation of Indian Export Organisations (FIEO), said import duties of 12-16 percent on products such as textiles and footwear would be reduced to zero under the agreement.

He added that, as the UK does not have a free trade agreement with China, Indian exporters would enjoy a tariff advantage over Chinese competitors, enhancing the competitiveness of Indian products in the UK market.

(KNN Bureau)