The recent signing of the India-United Kingdom Complete Economic and Trade Agreement (CETA) exemplifies the balanced negotiations characteristic of trade deals between large, comparable economies. The U.K. has granted India duty-free access to approximately 99% of its tariff lines. However,its approach to professional mobility was more reserved,capping annual visas for specialized roles like yoga instructors and classical musicians at 1,800. The agreement also lacks commitments on broader visa categories, such as those for business visitors or IT professionals, which India had prioritized.
Conversely, India has opened about 90% of its tariff lines for duty-free imports from the U.K. Crucially, it has excluded key agricultural products like dairy, apples, oats, and edible oils – notable demands from the U.K. Similarly, while india has committed to a significant reduction in automobile import duties over time, this will be implemented through a phased quota system over the next decade, allowing the domestic industry to adapt. A triumphant trade agreement is often characterized by both parties feeling satisfied yet not entirely content. Fundamentally, such bilateral agreements should not be viewed as zero-sum contests; enhancing bilateral trade benefits both nations, particularly in an era where major global trading powers are increasingly erecting tariff and non-tariff barriers.
While the U.K. represents a relatively modest trading partner for India, this presents a substantial opportunity for growth. Even though macro-level gains may initially be modest, sector-specific increases hold significant potential. Sectors such as agriculture, textiles, leather, and chemicals are poised for rapid gains. Furthermore, the long-term benefits are considerable. The U.K. serves as a vital gateway to Europe, a much larger trading partner for India. Goods destined for Europe could be channeled through the U.K., with the duty-free arrangement likely to facilitate this increased flow. International companies already exporting to the U.K.may also view India more favorably as an investment destination to leverage the duty-free access.It is now incumbent upon the Indian government to support Indian exporters in scaling up their operations and enhancing their international competitiveness.An critically important consideration is that such agreements establish precedents for future negotiations. Generally, the larger the economy involved in negotiations, the greater the concessions offered. Consequently, the United states and the European Union are likely to seek more from India than what has been conceded to the U.K.
