The Comprehensive Economic and Trade Agreement (CETA) between India and the United Kingdom came into effect on Wednesday, cutting tariffs on thousands of goods and increasing market access for service firms in both countries.

The deal grants Indian exporters immediate duty-free access to most British tariff lines, benefiting labor-intensive sectors like textiles. In return, the UK gains wider access to Indian markets through phased tariff cuts and quotas in sectors such as automobiles.

Indian Commerce and Industry Minister Piyush Goyal called the agreement a “defining milestone in India-UK ties” in a post on X. “The India-UK FTA creates unprecedented opportunities for our textiles, leather, gems & jewellery, engineering goods, marine products, chemicals, processed foods, MSMEs, farmers and manufacturers,” he said.

A British government policy paper hailed CETA as the “best deal that any country has ever agreed with India.” Under the deal, India will remove or reduce tariffs on 90% of tariff lines, covering 92% of existing goods imports from the UK. The UK will immediately scrap duties on 96.8% of tariff lines, covering 97.7% of trade value.

Indian Prime Minister Narendra Modi said the “economic linkages are going to get even deeper” in a post on X. “This moment reflects the trust between our democracies and our resolve to build a forward-looking partnership driven by trade, technology, investment and innovation,” he wrote.

Products including cosmetics, whiskies, chocolates, soft drinks, and lamb will become cheaper. Manufacturing sectors like cars, electrical circuits, high-end optical products, and medical devices are also expected to benefit. Indian workers temporarily moving to the UK will be exempt from National Insurance contributions for five years.

The agreement excludes poultry, eggs, sugar, and dairy products. India has also excluded apples, walnuts, and specific categories of gold bars and smartphones.

Source: www.aljazeera.com