Decoding The India–UK CETA: An Overview Of Trade, Services And Compliances

I. INTRODUCTION

On 24^th July 2025, India and the United Kingdom ("UK") executed the much-anticipated India–UK Comprehensive Economic and Trade Agreement ("India-UK CETA/CETA"), with the objective of establishing a transparent, predictable, and mutually beneficial legal framework to expand trade in goods and services, and promote investment flows between the two jurisdictions.¹ After fourteen rounds of negotiations which commenced in 2022 and concluded in May 2025, the fine print of the CETA was formally executed, granting unprecedented duty-free access to 99% of India's exports in the UK, covering nearly the entire trade basket. Though it is called a 'Comprehensive Economic and Trade Agreement', in substance and effect, it is the same as a 'Free Trade Agreement ("FTA"),² which is anticipated to benefit both nations by generating substantial opportunities across key sectors of mutual interest, thereby strengthening their strategic economic partnership.

The CETA aims to enhance market access by eliminating trade and non-trade barriers, fostering innovation and digital trade, and promoting the participation of small and medium-sized enterprises.³ Grounded in shared principles of economic cooperation, inclusive growth, and sustainable development, it affirms the Parties' commitment to good governance, regulatory autonomy, and the protection of legitimate public welfare objectives.⁴ It aims to ensure that the gains from deeper economic integration are shared with marginalised communities and provide mutual economic benefits.⁵

II. SUBSTANTIAL ELIMINATION OF TARIFF BARRIERS

Chapter 2 ('Trade in Goods') of the CETA obliges both Parties to reduce or eliminate customs duties on goods that qualify as "originating" under Chapter 3 ('Rules of Origin') the CETA.⁶ The timelines and scope of tariff liberalisation are detailed in Annex 2A ('Schedules of Tariff Commitments for Goods'). Under India's Schedule, certain goods are granted immediate duty-free access upon the CETA's entry into force ('EIF'). Other goods are subject to phased tariff reductions, with duties removed progressively over five ('E5'), seven ('E7'), or ten ('E10') years. This staged approach balances the twin objectives of granting meaningful market access while safeguarding sensitive domestic sectors. Accordingly, India has safeguarded sectors such as dairy, cereal, millets, pulses, certain essential oils, apples, certain vegetables, gold, jewellery, lab grown diamonds.

The CETA also sets out how tariff reductions are to be calculated. It specifies the applicable 'base rate' and prescribes rules for rounding off both ad valorem and specific duties, thereby ensuring clarity and avoiding interpretational disputes. At the same time, it entirely excludes certain goods from tariff elimination, while subjecting others to tariff-rate quotas, reflecting the Parties' discretion to protect highly sensitive domestic industries. While India's list of exclusions cover critical energy, fuels, smartphones etc, UK's exclusions are focused on meat products, egg-based items, milled rice, and certain forms of sugar.

Importantly, the Agreement provides that where a Most Favoured Nation ("MFN") duty is lower than the preferential duty under CETA, the lower MFN rate will apply. This ensures that the preferential treatment is meaningful and improves upon pre-existing obligations. By combining immediate tariff elimination with phased commitments and carefully crafted exceptions, the India-UK CETA provides legal certainty, transparency, and predictability to traders and investors, while balancing trade liberalisation with domestic sensitivities.

III. MINIMISATION OF NON-TARIFF AND TECHNICAL BARRIERS

In addition to liberalisation of tariffs, the CETA also addresses non-tariff impediments that often operate as hidden barriers to bilateral trade. Through a comprehensive framework across customs, sanitary, technical, digital, and regulatory domains, the CETA imposes clear procedural and substantive disciplines that enhance certainty, transparency, and predictability in bilateral trade..

1. Streamlined Customs and Trade Facilitation: Chapter 5 ('Customs and Trade Facilitation') of the CETA mandates simplified procedures⁷, electronic declarations, advance rulings, and a risk-based clearance system⁸. It also envisages time-bound release of goods as both Parties undertake to release goods within 48 hours⁹, while also establishing an Authorised Economic Operator framework to incentivise trusted traders.¹⁰ Collectively, these provisions aim to reduce transaction costs, improve efficiency, and align practices with international benchmarks.
2. Science-Based Standards of Acceptability: Chapter 6 ('Sanitary and Phytosanitary Measures') of the CETA sets rules on food safety, animal and plant health¹¹, ensuring predictable processes through direct cooperation between the responsible authorities of both countries. These rules build on existing WTO standards¹² and require both countries to base their measures on scientific risk assessments, recognise equivalence of each other's safety procedures where possible¹³, and carry out import checks¹⁴ and audits¹⁵ in a timely and transparent manner. These measures aim to prevent unwarranted interruptions to trade while maintaining international standards of health and safety.
3. Reducing Technical Barriers through Regulatory Convergence: Chapter 7 ('Technical Barriers to Trade') ensures that technical regulations and standards do not operate as disguised restrictions on trade. It reaffirms both Parties' duties under the WTO TBT Agreement,¹⁶ and mandates reliance on international standards where appropriate¹⁷. It further sets out provisions on equivalence¹⁸ and conformity assessment¹⁹, facilitating mutual recognition of procedures and reduction of duplicative compliance costs for exporters. The Chapter also contains rules on product marking and labelling,²⁰ and requires both countries to share information in advance and hold consultations before introducing new technical rules,²¹ with a 'reasonable interval' period (normally not less than six months) before implementation. This structured system aims to minimize sudden compliance shocks for exporters, thereby affording greater certainty to businesses.
4. Advancing Digital Trade: Recognising the centrality of digital commerce, Chapter 12 (Digital Trade) provides a legal framework to ensure open, fair, secure and inclusive digital trade. It reaffirms and mandates the legal validity of electronic contracts, signatures, trust services, and electronic invoices,²² promoting paperless trade and digital identities²³. At the same time it incorporates safeguards for consumers in online transactions,²⁴ inter alia, by protecting personal data and prohibiting forced transfers and disclosure of source-code, subject to limited investigative exceptions.²⁵ It further encourages cooperation on emerging technology, cybersecurity and encourages MSME participation in digital marketspace²⁶. The digital domain under the CETA further establishes a forward review mechanism, requiring both Parties to periodically assess and consider liberalisation of data-flow in future cross-border digital trade.²⁷
5. Promoting Good Regulatory Compliance and Transparency: Finally, the CETA incorporates mechanisms to encourage 'good regulatory practice' and 'transparency', with the intent to minimize non-tariff obstacles to trade. Chapter 24 ('Good Regulatory Practice') requires accessible publication of regulatory processes,²⁸ public consultation on major regulatory measures,²⁹ regulatory impact assessments,³⁰ retrospective reviews,³¹ and regulatory cooperation³². In supplement, Chapter 25 ('Transparency') mandates publication of laws, regulations and administrative rulings of general application,³³ fair notice and opportunity in administrative proceedings,³⁴ review and appeal of administrative actions,³⁵ and information exchange between Parties³⁶. Collectively, these measures promise enhanced predictability and reduced regulatory risks for traders and investors, converting abstract market access into concrete, enforceable procedural rights while preserving legitimate regulatory space.

IV. DOUBLE CONTRIBUTION CONVENTION

The Double Contributions Convention ("DCC"), signed as a side-letter to the CETA, entered into force concurrently with the India-UK CETA.³⁷ It seeks to eliminate the burden of dual social security contributions for temporary cross-border service providers by coordinating liability between the Parties.

Under the DCC, a "detached employee", defined as a person sent by their employer to work temporarily in the other state party, shall continue to pay social security contributions solely in their home country so long as the period of employment in the host country does not exceed 36 months. Accordingly, Indian employees deputed to the United Kingdom for up to three years are exempt from paying UK National Insurance Contributions while continuing contributions in India under the Employees' Provident Fund Scheme. Where the posting extends beyond 36 months, continuation remains subject to special provisions under the DCC.

This mechanism addresses the long-standing problem of double contributions, thereby ensuring continuity of employees' social security records, preventing financial duplication, and reducing compliance costs for enterprises. Legally, the DCC complements the mobility provisions under Chapter 8 ('Trade in Services') of the CETA by removing a significant non-tariff barrier to cross-border trade in services. From a commercial perspective, the DCC enhances predictability for both service suppliers and employers, reduces transaction costs, and facilitates the temporary movement of skilled personnel bolstering India's strategic advantage in global services trade.

For India, where services exports to the UK exceed USD 19.8 billion annually,³⁸ the removal of dual contributions strengthens competitiveness, significantly lowers project costs in the UK market. For professionals, it translates into higher take-home pay, as deductions for UK social security are avoided. Such financial relief improves cost efficiency and encourages mobility in sectors such as IT, consulting, and engineering, while simultaneously safeguarding employees' contributions within India's social security framework.³⁹

V. BOOSTING SERVICES AND PROFESSIONAL MOBILITY

The India–UK CETA significantly strengthens India's services sector by guaranteeing market access and fair treatment across a wide range of services (Chapter 8, Arts. 8.4–8.7). Annex 8A focuses on professional services, requiring both Parties to identify priority professions within 12 months and to conclude mutual recognition arrangements within 36 months. This framework speeds up recognition of qualifications and licenses,⁴⁰ directly benefiting Indian professionals in sectors like IT, finance, healthcare, and education.

Complementing this framework, Chapter 10 ('Temporary Movement of Natural Persons') streamlines the rules for entry, movement and temporary stay of business visitors, intra-corporate transferees, contractual service suppliers, and independent professionals.⁴¹ Each category comes with defined eligibility conditions and maximum durations of stay, reducing uncertainty. For example, intra-corporate transferees may stay in India up to three years, with limited renewal, while short-term business visitors may stay up to 90 days⁴². Conversely, intra-corporate transferees from India may stay in UK up to five years, while short-term business visitors may stay up to 180 days.⁴³ This is particularly relevant as Indians are the largest recipients securing 16% of all UK work visas securing 16% of all UK work visas, primarily due to high participation in skilled work across the health sector and other industries.⁴⁴

By providing clear categories of natural persons, time-bound procedures, and transparent conditions of stay, these provisions lower transaction costs and enhance predictability for enterprises deploying skilled personnel across borders. By providing liberal access to the UK's services market and clear pathways for professional mobility, the CETA reinforces India's strengths in knowledge-driven sectors and supports its role as a global hub for talent and services.

VI. DISPUTE SETTLEMENT UNDER THE INDIA-UK CETA

The India–UK CETA establishes a binding dispute settlement framework to ensure uniform interpretation and effective implementation of its provisions. Chapter 29 aims to provide an efficient and transparent process for preventing or settling disputes concerning the interpretation or application of the CETA.⁴⁵ It applies where a Party alleges non-fulfilment of obligations under the Agreement, except where expressly excluded by specific provisions in other chapters⁴⁶. The dispute settlement mechanism under the CETA is detailed as follows:

1. Consultation phase: A Party alleging breach of CETA obligations must first request, in writing, consultations with the other Party concerning any matter of interpretation, implementation, or application of the CETA ⁴⁷. The responding Party must reply in writing within 10 days, and consultations must occur within 30 days (or 15 days in urgent cases)⁴⁸. Consultations are deemed concluded if not resolved by 60 days (or 30 in urgent cases)⁴⁹. This phase is mandatory before any formal panel is established and is intended to promote amicable settlement through dialogue before recourse to adjudication.
2. Establishment of Panel: If consultations fail within the stipulated timeframe, the complaining Party may request, in writing, the establishment of an arbitral panel⁵⁰ (. The request must again outline the measure, the consultations already made, and legal/factual arguments. The appointment of panellists is governed by the Rules of Procedure set out in Annex 29A which guarantees procedural fairness and equal treatment of both Parties.⁵¹ Annex 29A-a further sets an indicative timetable for panel proceedings, including deadlines for submissions, responses, hearings, and issuance of findings and reports, ensuring timely adjudication of disputes.
3. Composition and Qualification of Panel: The panel normally has three panellists, one appointed by each Party, and a neutral chair jointly selected, unless otherwise agreed by the Parties⁵². Panellists must be impartial, independent, experienced in law or international trade, and adhere to the Code of Conduct⁵³.
4. Panel Proceedings and Reports: The panel examines the facts and applicable legal provisions⁵⁴ and issues an interim report (within 150 days, or 120 days if urgent), allowing comment by the Parties. The final report must follow no later than 30 days after the interim report which shall be binding upon both Parties⁵⁵.
5. Compliance and Remedies: If the responding Party is found in breach or violation of its CETA obligations or the report, it must promptly bring its measures in conformity. Where immediate compliance is not possible, a reasonable period (not to exceed 15 months) may be agreed or determined.⁵⁶ Failing this, the Agreement permits temporary remedies such as compensation or suspension of benefits until compliance is achieved. Parties are also offered an opportunity for reasonable adjustments before suspending obligations.
6. Further Reviews and Suspension Measures: If there are disagreements over compliance, the complaining Party may request a compliance review panel.⁵⁷ If compliance is not achieved, the complaining Party may seek suspension of concessions or other obligations, or compensation⁵⁸, subject to principles and procedural safeguards⁵⁹.
7. Confidentiality and Disclosure: Provisions in Annex 29A-b⁶⁰ (Confidential Information) and Annex 29A-c (Declaration of Non-Disclosure)⁶¹ protect sensitive commercial or other proprietary information submitted in the dispute. Further, panellists are bound by a Code of Conduct and disclosure obligations to prevent conflicts of interest and preserve the integrity of proceedings.⁶²

These provisions establishes a comprehensive, transparent, and enforceable dispute resolution framework which seek to balance procedural fairness, protection of legitimate interests, and enforcement capacity, thereby strengthening the overall credibility of the CETA.

VII. INVESTMENT PROTECTION

The India–UK CETA facilitates trade in goods and services but omits investment protection, leaving a critical gap in securing the rights and interests of investors from both sides. Recognizing this, India and the UK are actively negotiating a separate Bilateral Investment Treaty (BIT) to ensure legal safeguards and dispute resolution mechanisms, building on India's evolving treaty practice. ⁶³ While the 2015 Model BIT was restrictive, subsequent agreements, such as the India–UAE BIT, balanced investor safeguards with regulatory autonomy, leading to stronger trade and investment flows. A similarly calibrated India–UK BIT would reinforce CETA's trade liberalisation by reducing disputes, encouraging sustainable UK investments in India's priority sectors, including infrastructure, technology, and renewable energy thereby strengthening economic ties between the two nations.

VIII. CONCLUSION

The India–UK CETA marks a significant step in advancing bilateral trade and economic integration, embedding a legally enforceable framework that combines ambitious market access with regulatory discipline. By providing duty-free access to nearly 99% of India's exports, particularly in labour-intensive and agri-based sectors such as textiles, footwear, gems, jewellery, and marine products, the Agreement levels the competitive playing field and secures enforceable market rights previously unavailable to Indian exporters. This is poised to generate tangible gains for MSMEs, artisans, and farmers, reinforcing inclusive growth.

Beyond tariff liberalisation, the CETA addresses hidden trade barriers by harmonising customs processes, reinforcing WTO-aligned sanitary and phytosanitary standards, reducing duplicative technical compliance, and ensuring transparent regulatory practices. In parallel, provisions on digital trade, professional mobility, and the Double Contributions Convention remove structural constraints on export of services, reduce compliance costs, and enhance the competitiveness of India's knowledge-driven sectors.

The credibility of the CETA finds further strength by incorporation of a binding dispute settlement mechanism which ensures procedural fairness, uniform interpretation, and enforceability of obligations in a fair, transparent and time bound manner. Though the CETA focuses on aspects of trade in goods and services and remains silent on investment protection, ongoing negotiation towards a BIT are expected to fill this lacuna by balancing investor safeguards with India's regulatory autonomy.

Upon cumulative assessment, it can be concluded that the India-UK CETA is more than just an conventional agreement limited to trade in goods and services. The ambitious tariff liberalisation by both nations, coupled with systemic reforms in regulatory governance and services mobility, signifies the mutual intent to build a more comprehensive framework to encourage trade and investment through fair and competitive market access. It provides a stable, transparent, and future-oriented framework that is likely to deepen bilateral trade, catalyse investment flows, and consolidate India's position in global value chains.

Footnotes

1. India–UK Comprehensive Economic and Trade Agreement (CETA), Preamble, https://www.commerce.gov.in/international-trade/trade-agreements/india-united-kingdom-comprehensive-economic-and-trade-agreement/.

2. Draft Explanatory Memorandum on the India–UK Comprehensive Economic and Trade Agreement, U.K.–India, para. 2.1 (July 24, 2025), https://assets.publishing.service.gov.uk/media/6881f4d5901d5f8d47120586/uk-india-ceta-draft-explanatory-memorandum.pdf.

3. India–UK Comprehensive Economic and Trade Agreement (CETA), Preamble, https://www.commerce.gov.in/international-trade/trade-agreements/india-united-kingdom-comprehensive-economic-and-trade-agreement/.

4. Id.

5. Id.

6. Id. Article 2.6.

7. Id Article 5.4.

8. Id Article 5.7.

9. Id. Article 5.5.

10. Id. Articles. 5.5, –5.9.

11. Id. Article 6.2.

12. Id. Article 6.16.

13. Id. Article 6.6.

14. Id. Article 6.10.

15. Id. Article 6.8.

16. Id. Article 7.4.

17. Id. Article 7.5.

18. Id. Article 7.6.

19. Id. Article 7.7.

20. Id. Article 7.8.

21. Id. Articles 7.9–7.13.

22. Id. Articles 12.5-12.9.

23. Id. Articles 12.7-12.8.

24. Id. Article 12.13.

25. Id. Article 12.15.

26. Id. Articles 12.12, 12.18, 12.19.

27. Id. Article 12.20.

28. Id. Article 24.4.

29. Id. Article 24.6.

30. Id. Article 24.7.

31. Id. Article 24.8.

32. Id. Article 24.9.

33. Id. Article 25.2.

34. Id. Article 25.3.

35. Id. Article 25.4.

36. Id. Article 25.5.

37. Letter from the United Kingdom to India Regarding the Double Contributions Convention (July 24, 2025), https://www.commerce.gov.in/wp-content/uploads/2025/07/UK-letter-to-India-DCC.pdf.

38. Press Release, Press Info. Bureau, Ministry of Commerce & Industry, Government of India, India and U.K. Sign Double Contributions Convention (July 24, 2025), https://www.pib.gov.in/PressNoteDetails.aspx?ModuleId=3&NoteId=154945.

39. U.K. Dep't for Bus. & Trade, U.K.–India Double Contributions Convention (DCC) Explainer (July 24, 2025), https://www.gov.uk/government/publications/uk-india-trade-deal-double-contributions-convention-explainer/uk-india-double-contributions-convention-dcc-explainer.

40. India–UK Comprehensive Economic and Trade Agreement (CETA), Annex 8A.4–8A.5, https://www.commerce.gov.in/international-trade/trade-agreements/india-united-kingdom-comprehensive-economic-and-trade-agreement/.

41. Id. Articles 10.4–10.09.

42. Id. Article 10A (Schedule of India).

43. Id. Annex 10A (Schedule of UK).

44. Migration Observatory, Univ. of Oxford, Work Visas and Migrant Workers in the U.K. (Apr. 25, 2024), https://migrationobservatory.ox.ac.uk/resources/briefings/work-visas-and-migrant-workers-in-the-uk/.

45. India–UK Comprehensive Economic and Trade Agreement (CETA), Article 29.2, https://www.commerce.gov.in/international-trade/trade-agreements/india-united-kingdom-comprehensive-economic-and-trade-agreement/.

46. Id. Article 29.4.

47. Id. Article 29.7.

48. Id. Article 29.7.3.

49. Id. Article 29.7.4.

50. Id. Article 29.8.

51. Rules of Procedure for Dispute Settlement Panels, India–UK CETA, r. 29A.3–29A.10.

52. Id. Article 29.9.

53. Id. Article 29.10.

54. Id. Article 29.11.

55. Id. Article 29.12.

56. Id. Article 29.13.

57. Id. Article 29.14.

58. Id. Article 29.15.

59. Id. Article 29.15-29.16.

60. Id. Annex 29 A-b.

61. Id. Annex 29 A-c.

62. India–UK Comprehensive Economic and Trade Agreement (CETA), Annex 29B, Annex 29B-a, https://www.commerce.gov.in/international-trade/trade-agreements/india-united-kingdom-comprehensive-economic-and-trade-agreement/.

63. Press Information Bureau, Prime Minister's Office, India, India-UK Vision 2035 (July 24, 2025), https://www.pib.gov.in/PressReleasePage.aspx?PRID=2147956.

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