Maturing approach: On the India-U.K. Comprehensive Economic and Trade Agreement
The India-UK Comprehensive Economic and Trade Agreement (CETA), signed in London in July 2025 after multi-year negotiations, formally entered into force on July 15, 2026, alongside a parallel Double Contribution Convention (DCC) on social security.
Under CETA, the United Kingdom removed duties on 96.8% of its tariff lines (97.7% of trade value) immediately, including on labour-intensive sectors such as textiles, leather, footwear and marine products; India will remove or reduce tariffs on about 90% of tariff lines (92% of import value from the UK), with 64.1% eliminated immediately and a further 21% phased out over time, while sensitive sectors such as dairy, cereals, pulses and certain agricultural products remain excluded.
The agreement is described as India's most comprehensive trade agreement with a G7 economy and the UK's most significant bilateral trade agreement since it left the European Union.
Commentary on the agreement's entry into force notes that securing tariff concessions is only the first step; converting that market access into an actual increase in India's share of UK imports will require sustained effort on quality standards, branding and export competitiveness.
CETA, CEPA and FTA — Distinguishing India's Trade Agreement Types
India's bilateral trade pacts use different labels depending on scope: a Free Trade Agreement (FTA) primarily addresses goods tariffs; a Comprehensive Economic Cooperation/Partnership Agreement (CECA/CEPA) additionally covers services, investment and other economic cooperation areas; a Comprehensive Economic and Trade Agreement (CETA) — the label used for the UK deal — is functionally similar to a CEPA, covering goods, services, investment, IP and other chapters, but reflects UK/EU-style nomenclature.
Key Details
- India-UAE CEPA: signed February 18, 2022; entered into force May 1, 2022; UAE removed duties on 97.4% of tariff lines (99% of India's export value); India removed duties on over 80% of tariff lines (90% of import value from UAE).
- India-Australia ECTA (Economic Cooperation and Trade Agreement): signed April 2022; entered into force December 29, 2022; explicitly an "interim" agreement, with negotiations for a full Comprehensive Economic Cooperation Agreement (CECA) to follow — a structural distinction from the India-UK CETA, which is a comprehensive agreement from inception.
- All these instruments are negotiated and operate under India's Ministry of Commerce and Industry, with tariff schedules notified to the World Trade Organization (WTO).
The India-UK CETA follows the template of India's post-2022 wave of comprehensive trade agreements (UAE, Australia), extending it to a G7 economy for the first time, with broader tariff elimination on the UK side and phased, more calibrated liberalisation on India's side to protect sensitive sectors.
GATT Article XXIV — The MFN Exception That Enables FTAs
Under the WTO's General Agreement on Tariffs and Trade (GATT), the Most-Favoured-Nation (MFN) principle (Article I) requires a member to extend any tariff concession given to one trading partner to all WTO members equally. Article XXIV of GATT 1994 is the specific exception that permits Free Trade Areas and Customs Unions, allowing members to grant preferential treatment to FTA partners without extending it to the rest of the WTO membership.
Key Details
- To qualify under Article XXIV, an FTA must eliminate duties and restrictive regulations on "substantially all trade" between the parties, and must not raise external tariffs against non-parties above pre-agreement levels.
- FTAs must be notified to the WTO for review under the Committee on Regional Trade Agreements (CRTA).
- The concept of trade creation (new, more efficient trade replacing costlier domestic production) versus trade diversion (efficient imports from non-member countries displaced by less-efficient FTA-partner imports due to tariff preference) is the standard economic framework used to evaluate whether an FTA is welfare-enhancing.
The India-UK CETA's near-total UK-side tariff elimination and India's phased ~90% coverage are calibrated to meet the GATT Article XXIV "substantially all trade" threshold while India retains protection on sensitive lines such as dairy and pulses.
Double Contribution Convention (Social Security Agreement)
A Double Contribution Convention (DCC), also called a Social Security Agreement (SSA), prevents workers on temporary overseas assignments from having to make mandatory social-security contributions simultaneously in both the home and host country. India has signed such agreements with over a dozen countries to protect the interests of its overseas workforce.
Key Details
- The India-UK DCC entered into force alongside CETA on July 15, 2026, and extends the exemption period for Indian professionals on short-term UK assignments from 3 years to 5 years, during which they can continue contributing to India's Employees' Provident Fund Organisation (EPFO) instead of UK National Insurance Contributions (NIC).
- Over 75,000 Indian professionals and more than 900 Indian companies operating in the UK are expected to benefit from the exemption.
- Comparable Indian SSAs exist with countries including Germany, France, Australia, Japan and Canada, reflecting the growing weight of "mode 4" (movement of natural persons) provisions in India's trade diplomacy.
The DCC is a companion instrument to CETA addressing the services/labour-mobility dimension of the deal, complementing the goods-tariff liberalisation that is the editorial's primary focus.
- India-UK CETA signed: London, July 2025; entered into force: July 15, 2026.
- UK tariff liberalisation: 96.8% of tariff lines (97.7% of trade value) duty-free immediately; sectoral tariffs cut to zero from levels as high as 70% (processed foods), 21.5% (marine products), 18% (engineering goods/auto components), 16% (leather/footwear), 12% (textiles), 8% (chemicals/pharma).
- India tariff liberalisation: about 90% of tariff lines (92% of import value from UK, based on 2022 trade); 64.1% of lines cut immediately, a further 21% phased out; dairy, cereals, millets, pulses, apples, gold and lab-grown diamonds excluded.
- Double Contribution Convention: exemption period extended from 3 to 5 years; over 75,000 professionals and 900+ companies expected to benefit.
- Comparators: India-UAE CEPA (in force May 2022) and India-Australia ECTA (in force December 2022) were India's earlier post-2022 comprehensive/interim trade agreements.