Why in News?

• India and the United Kingdom signed a historic Comprehensive Economic and Trade Agreement (CETA)

• They also endorsed a long-term strategic plan titled India–UK Vision 2035

• The agreement focuses on strengthening cooperation in trade, defence, technology, education, and climate action

What is the India–UK CETA?

• A Free Trade Agreement (FTA) between India and the UK

• Grants zero-duty access on 99% tariff lines for Indian exports

• Covers goods, services, mobility, investments, and social security

• Aims to benefit labour-intensive sectors, MSMEs, women, professionals, and youth

• Designed to create a more inclusive, growth-oriented trade partnership

Key Provisions of CETA:

Goods and Market Access:

• Zero customs duty on 99% tariff lines, covering nearly 100% of India’s export value to the UK

• Major sectors to benefit include textiles, gems and jewellery, leather, toys, marine products, and processed food

• Tariff rates for processed food reduced from 70% to 0%

• Sensitive items like dairy are protected under exclusion lists to safeguard domestic producers

Services and Mobility:

• Enhanced access for IT, financial services, legal firms, education providers, architects, and consultants

• Visa liberalisation for Contractual Service Suppliers, Intra-Corporate Transferees, and Independent Professionals

• Mutual recognition of professional qualifications in key areas such as healthcare, engineering, and education

• Supports Indian professionals to work abroad more smoothly and competitively

Double Contribution Convention (DCC):

• Indian professionals exempt from social security contributions in the UK for 3 years

• Helps increase take-home salary and reduces costs for Indian employers operating in the UK

• Addresses a long-standing issue of dual contributions for social security

Inclusive Growth Focus:

• Dedicated measures for MSMEs, artisans, women entrepreneurs, farmers, and youth

• Access to UK’s $63.4 billion agricultural market for Indian products like tea, coffee, spices, fruits, meat, and dairy (excluding sensitive items)

• Digital trade facilitation and paperless customs processes for smoother trade operations

• Establishment of SME contact points to support small businesses in both countries

About India–UK Vision 2035:

• A strategic blueprint built on five key pillars: Growth, Technology, Defence, Climate, and Education

• Aims to create a resilient, future-ready partnership that supports mutual development

Growth and Jobs:

• Target to double bilateral trade from $56 billion by 2030

• Boost investments through Bilateral Investment Treaty (BIT) and UK-India Infrastructure Financing Bridge

• British International Investment (BII) to support Indian development projects

• Greater opportunities in legal, financial, insurance, and asset management sectors through regulatory harmonisation

Technology and Innovation:

• Establishment of a Joint AI Research Centre to promote artificial intelligence collaboration

• Partnerships in 6G development, semiconductors, biotechnology, and cybersecurity

• Formation of an India–UK Critical Minerals Guild for green technology supply chains

• Support for startups, catapults, incubators, and biofoundries in both countries

Defence and Security:

• Launch of a 10-Year Defence Industrial Roadmap to promote joint research and production

• Focus areas include electric propulsion, underwater systems, and directed energy weapons

• Upgraded 2+2 defence dialogue and increased joint military exercises

• UK to depend on India for logistics and maritime support in the Indian Ocean Region (IOR)

• Deepening of counter-terrorism cooperation and maritime security frameworks

Climate and Clean Energy:

• Joint efforts on climate finance, carbon markets, offshore wind energy, and small modular nuclear reactors (SMRs)

• UK support for Indian-led initiatives like International Solar Alliance (ISA), One Sun One World One Grid (OSOWOG), and Zero Emission Vehicle Transition Council (ZEVTC)

• Promotion of the Net Zero Innovation Partnership for clean technology development

• Collaboration on agroforestry and blue carbon research through the India–UK Forest Partnership

Education and People-to-People Ties:

• UK universities to open campuses in India

• Launch of dual degree programs between Indian and UK institutions

• Introduction of a Green Skills Partnership to address climate-tech skill gaps

• Implementation of the Young Professionals Scheme for youth exchange

• Mutual recognition of academic degrees and professional certifications

Strategic Significance for India:

Trade:

• Major increase in exports and duty-free market access

• Expansion of MSME participation in global markets

Employment:

• Creation of jobs in textiles, food processing, IT, and engineering sectors

Youth and Mobility:

• Improved pathways for skilled migration and international careers

• Access to more job opportunities and professional growth abroad

Innovation:

• Joint development in cutting-edge sectors like AI, green hydrogen, quantum computing, and 6G technology

Climate Goals:

• Enhanced access to green finance, clean energy tech, and carbon trading platforms

• Cooperation on sustainable farming and carbon sequestration strategies

Defence:

• Boosts India’s self-reliance in defence with co-development of advanced technologies

• Strengthens India’s role in maritime security and regional stability

Multilateral Reform:

• Shared commitment to reforming international institutions like the UN, WTO, and IMF

Conclusion:

• The India–UK CETA and Vision 2035 represent a turning point in bilateral relations

• The agreements connect trade, mobility, technology, defence, and climate into a unified framework

• With a focus on inclusive growth, sustainability, and innovation, this partnership strengthens India’s role as a leading global power in the 21st century.