India-UK CETA: A Turning Point for Trade and Banking Growth

According to recent trade figures, India's exports to the UK stood at US$14.55 billion in 2024-25, reflecting a growth of 12.09 percent from the previous year. With CETA in force, this growth trajectory could accelerate sharply. This graph visually reinforces the upward export trend.

- By Gaurang Aggarwal Chief Manager & Faculty Union Bank of India Union Learning Academy, Corporate & Treasury, Gurugram

On 29 July 2025, India and the United Kingdom signed the Comprehensive Economic and Trade Agreement (CETA), marking a historic milestone in the economic partnership between the two countries. This agreement comes at a time when India is aiming to integrate more deeply with global markets and the UK is seeking to strengthen its post-Brexit trade architecture. Together, these two democracies have unlocked a framework that not only addresses tariffs and trade in goods, but also services, investments, mobility, and institutional cooperation. For India, the deal holds the promise of a stronger export trajectory and expanded opportunities for its micro, small and medium enterprises (MSMEs). For the banking sector, it represents a chance to anchor itself more firmly as a growth partner in international trade and corporate finance.

The Promise of Tariff Elimination

One of the most important provisions of the CETA is the near-elimination of tariffs between India and the UK. India will now enjoy tariff-free access for almost 99 percent of its exports to the UK. This includes labour-intensive industries such as textiles, leather goods, gems and jewellery, marine products, and engineering goods, which have traditionally been subjected to tariff barriers in the UK. For exporters in these categories, the removal of tariffs translates into direct cost advantages, making their products more competitive in global markets.