India-UK CETA: A Win-Win For Both Countries

The UK could now attract nearly £ 6 billion (around US$ 8 bn) in new investment and export opportunities from India. The deal could generate over 2,000 jobs in the UK, as Indian companies expand their presence in the country and British firms secure new contracts in the Indian market.

While bilateral trade is projected to grow by £ 25.5 billion (around US$ 33.5 bn) annually, the presence of Indian industries in the UK will also expand, providing job opportunities to locals. As of now, 1,197 Indian-owned companies are operating in the UK, an increase of over 23 per cent from last year’s 971.

What Makes The UK Attractive To Indian Investors?

Despite challenging global economic conditions in 2024, the UK’s economy remained steady. A predictable legal framework, global connectivity, and government incentives, such as research and development tax credits, investment zones, and support from British Business Bank and UK Export Finance (UKEF), make it an attractive destination for Indian investors.

As of 2024, India is the UK’s 11th-largest trading partner, contributing 2.4 per cent to the country’s overall trade. In 2024, bilateral trade reached £42.6 billion (around US$ 57 bn), up from £ 39.3 billion (around US$ 52.7 bn) in 2023, supporting over 600,000 jobs across both countries.

Importantly, technology collaboration is picking up pace. The UK-India Technology Security Initiative (TSI), launched in July 2024, is paving the way for deeper cooperation in AI, semiconductors, quantum computing, and biotech, besides opening opportunities for exports of leather, footwear, and other goods.

By 2035, the UK is projected to remain the world’s sixth-largest economy, and India is projected to be the third. Following the deal, UK investment in solar, hydrogen, battery technology, and electric vehicle (EV) infrastructure in India is expected to rise as the country moves steadily towards energy transition. This will understandably also create opportunities for JVs with Indian companies dealing with green energy.

Drink, Drive & Be Merry

India is the world’s third-largest alcoholic beverage market and ranks second globally in consumption of alcohol. India has one of the highest numbers of whisky drinkers in the world. The CETA will halve import duties on UK-produced whisky and gin from the current 150 per cent to 75 per cent in the first phase, with a further reduction to 40 per cent over the next 10 years.

The automobile industry in India has generated numerous jobs, and this is set to get a further push with access to the UK market, as the free-trade pact between the two nations removes 18 per cent duty on exports to the European nation.

Concessions offered by India, the world’s third-largest auto market by sales, will make luxury car imports from the UK cheaper for Indian consumers. 

After the UK, trade agreements with the Gulf, particularly Oman, which is also ready, could be announced soon. Negotiations will be launched with Qatar and Bahrain as well.