Antithesis to Tariff Bravado?

Amid rising US-led tariff wars, the India-UK CETA appears to offer a timely trade boost and strategic cushion, but concerns over sectoral impacts and future trade pressures remain

- KDP RAO

The Comprehensive Economic and Trade Agreement (CETA), signed last month between India and the UK, is one of the major trade deals that can potentially be a game changer for India's foreign trade in today's global trade uncertainties. The agreement, as experts say, has the potential to strengthen the UK-India Strategic Partnership in trade, encompassing fields such as technology, defence, climate, innovation, etc., while equally guaranteeing protection to sensitive sectors—especially in today's heightened global trade tensions and amid the unkind disposition of the US, if President Trump's sudden unilateral clampdown of a 25 per cent tariff on India last week (not to mention the penalty for trade with Russia) is any indication. However, whether deals of this sort can be a way forward during trade wars is a question worth mulling.

Both governments have acclaimed the deal as "historic" and "ambitious." It is heartening that the UK praised the deal as the "biggest and most economically significant bilateral trade deal since the EU," reflecting the complementary strengths of the two economies—India's rapid growth and large market, and the UK's advanced services and manufacturing sectors. The deal is believed to ensure 'most-favoured-nation' treatment for India. Bilateral trade is expected to increase to USD 112 billion by 2030, thanks to mutual tariff reductions. While growth of exports in sectors like textiles, footwear, and agriculture is predicted for India, for the UK, its GDP is expected to increase by £4.8 billion annually and wages by £2.2 billion each year.