IMPACT OF INDO UK FREE TRADE AGREEMENT

 CETA

Trade negotiations between India and UK which started from January 2022 successfully completed in July 2025 resulting in a Comprehensive Economic and Trade Agreement (CETA).The new strategic  cooperation plan has replaced earlier Roadmap 2030 with  comphrensive  India- UK  Vision 2035 . This outlines comphrensive road map to deepen strategic ties across Trade, technology, Defence, education, climate and innovation aiming at enhancing investment, job creation, clean energy, people to people link,shared in democratic values, mutual growth and global leadership. Broadly the intention is  to boost existing bilateral trade of $56 billion .As per the Free Trade Agreement signed on 24th July UK has removed tariff on 99% of its products apart from availing zero duty access to 99% of Indian export to UK. Bilateral Trade is expected to grow two times from $56 billion lines.But as per the study of  Global Trade Research Initiative only $ 6.5 billion or 45% of what India currently exports to UK like textiles, footwear,carpets ,fresh fruits, automobiles etc will enter duty free from India to UK. India's above mentioned mostly labour intensive sectors are expected to generate more jobs. Other features of the FTA include- exemption of  75000 Indian workers from UK social security for 3 years. Similarly Indian professionals are allowed to work in 35 UK sectors for two years without a UK office. Exports of petroleum, Pharmaceuticals,diamonds and air craft components etc is expected to yield $ 8 billion. Exports of Gems and Jewelry is likely to double within 2-3 years. On the otherhand India has agreed to eliminate or reduce tariff for  imports from UK on 90% of tariff lines which comprises  of 92% of our imports from UK  including Alcohol especially whiskey which is set to become cheaper in India along with British cars and engineering goods. Large luxury cars imported from UK is subject to import duty cut to 10% over  years.India UK FTA has opened government procurement market to British bidders making an important shift in policy which was earlier restricted. However it does not apply procurement made for national security purposes or public procurement policies for micro small enterprises (MSEs)and procurement of agricultural products.

LIMITATIONS AND CHALLENGES OF CETA

Experts anaysed probable Limitations of India UK FTA  in terms of increased competition leading to the possibility of potential harm to our job generating MSME sector. ,Despite substantial efforts at the national level, slow investment can hinder international technology transfer and can distort application of climate friendly technologies. In fact technology transfer to developing countries must be on ("favourable terms") . In fact demand for environment/ climate  friendly technologies have to be met at any cost. The agreement lead to assymetrical benefits because UK can supply high  value goods and services whereas India may largely get benefits from low and medium value exports to UK. Such assymetry may lead imbalances in the distribution of benefits and trade deficit. FTA provision  assigned for increased professional mobility is also  limited  for Indian scientific and technical manpower because of  ongoing concerns about non tariff barriers and strong regulatory framework. In fact further the agreement doesn't fully address sensitive sectors like agriculture, environmental issues Carbon Border Adjustment Mechanism (CBAM) and  more crucial is  the question of public health and patent rights or  trade related intellectual property Rights TRIPS  related issues. 

Potential for increased import of UK agricultural products particularly diary products could negatively impact Indian farmers. There are concerns about the competiveness of Indian agricultural products to  be exported to UK.In case imports are growing faster than exports it may  lead to increasing trade deficit. According to intellectual property experts CETA between India and UK may work in favour of patent owners due to certain intellectual property and regulatory clauses in the agreement that tend to delay or curb the production of life saving generics impacting both in India and across the global South. In other words the agreement could impact  access and affordability of  medicines in India. Compulsory licensing under Indian patent Act allows government to authorise the production of patented product or process by a third party without the patent owners consent, in order to address public needs like National emergencies provided three years have completed after the patent is granted. On the otherhand voluntary licensing is an arrangement where the patent holder and the third party from any of the country come to an agreement to provide affordable medicines in their respective countries some time with discounts. Giving license to third party may be either exclusive or non exclusive right to manufacture the product.It may be noted here that after concerted effort by developing countries during 2001 Doha  WTO Ministerial Conference only the  flexibility of compulsory licensing and parallel importing of medicines were permitted. 

 CONCLUSION 

India UK FTA brings a new era of post Brexit economic  cooperation. It is termed as a trust based win -win partnership model in a multi polar world economy. It represents a shift in India's trade strategy impacting the global digital economy and eventually enhancing economic resilience, service exports, employment and digital sovereignty. It strengthens the comprehensive and strategic partnership between the two countries. Indian goods exports including textiles, footwear, carpets,seafood, automobiles, and fresh foods will enter the UK market tariff free.On the other hand imports from UK is set to include alcohol especially whiskey, British cars and engineering goods which becomes cheaper in India. Large engine petrol cars imported to India will see their import duty cut to 10% . FTA made both countries to  negotiate and make comparative advantage with making reasonable adjustments. However if  the competiveness of domestic products are not good,  imports from the free trade partner will replace it .While whiskey and alcohol become cheaper in the case of medicine imports, patented medicine becomes costlier due to voluntary licensing instead of compulsory licensing. Similarly if we are unable to compete with high end products and our technology used is not competitive for Indian industry particularly for MSME'S and traditional industries it may lead to job losses