Journal of Contemporary Politics

Abstract

The India-UK Free Trade Agreement (FTA), officially known as “Comprehensive Economic and Trade Agreement” (CETA), was signed on July 24, 2025, in the backdrop of global tensions and increasing protectionist policies. The CETA represents the UK’s new preference to strengthen relations with countries of the Asia-Pacific region in the post-Brexit era; and, for India, it was both strengthening historical and cultural ties with the UK in a new format of economic relations and evolving a yardstick for FTA with new partners. Going beyond the traditional pattern of trade, the CETA involves services, investment and movement of persons besides goods, with reduced tariffs covering 92% of trade between them. But at the same time, both have taken precautions to safeguard the interests of their sensitive products, particularly in the agricultural sector. Apprehensions are expressed by the concerned industry and experts on the effect of the agreement on India, as well as the future policies by both that will nullify the benefits. Once implemented, the agreement will have a significant impact on the economic activities of both countries, boosting both the trade volume and value, and accruing benefits from comparative costs. So, the benefits are likely to outweigh the problems in the long run, and both could benefit in different ways with the coupling of their economies. The agreement also signifies the preference of both countries for an open, rules-based international order and to forge deeper relations with new like-minded countries in the context of global uncertainties, and to serve as a template for future economic and commercial treaties with others.

Keywords: Free Trade Agreement, CETA, Tariff, Bilateral trade, India-UK Trade