NEW DELHI: The Comprehensive Economic and Trade Agreement (CETA) between India and the United Kingdom will come into force from July 15 with both sides reaching an understanding on the last-leg issues around Britain’s steel safeguard measures.
The date for Entry into Force (EIF) of the agreement was announced by UK Prime Minister Keir Starmer and Prime Minister Narendra Modi after their meeting on the sidelines of the G-7 Summit at Evian in France.
The CETA, signed in July 2025, was set to come into force in April, but the UK’s announcement of safeguard measures on steel imports led negotiators back to the table. The safeguard measures were announced after ratification formalities on both sides were complete. It took a few rounds of talks among officials and two meetings between Commerce and Industry Minister Piyush Goyal and UK Business and Trade Secretary Peter Kyle to settle the issue.
Modi and Starmer found a solution to the vexed steel quota issue that has been hanging over the CETA rollout. The two leaders were earlier caught on a microphone at the G7 summit in France on Wednesday saying some form of agreement had been reached.
“We did it,” Modi could be heard saying to Starmer as the two men meet on the sidelines of the meeting, with other leaders milling around, Bloomberg reported. The agency also reported Starmer as then replying, “We did it. Yes, yes, yes, I hear. We got it over the line. So this is good.” The details of the solution are not yet known.
India has been worried that new UK steel trade measures are restricting its exports of the alloy to the island country. The quota prescribed by London, as part of its carbon reduction initiatives, and parallel to the European Union’s CBAM policy, is significantly lower than India’s current level of steel exports to the UK. Indian government, at the behest of the country’s fast-growing steel industry, suggested resolving the issue by raising quotas to at least the average level of the last three years’ shipments.
Though the deal was sealed last year, full implementation was delayed. India initially blamed the UK’s parliamentary process for the delay, but the steel quotas then became an obstacle.
Along with steel import curbs, two other issues needed to be sorted out between the two countries to get the agreement going. The steel import curbs are in the form of restricted duty-free quotas for all suppliers to the UK. .
India’s exports of iron and steel and their products to the UK stood at $ 893.4 million in 2025-26, which accounts for a significant portion of $ 13.4 billion of total merchandise exports to the UK.
A team of Indian officials visited London this week to advance discussions on the newer issues that have cropped up. The trade ministers from both sides are holding frequent meetings to sort out the issues so that the CETA can be rolled out.
The last meeting between Goyal and Kyle was held virtually on Sunday after which negotiators met in London and closed the deal. At the G-y both Starmer and Modi were overheard saying “we did it”
The deal aims to double the bilateral trade between the two sides to $ 120 billion by 2030 from $ 64.1 billion in 2025. In 2025 goods and services exports from India to the UK stood at $ 38.5 billion while imports were $ 25.8 billion. Along with the trade agreement, the Double Contribution Convention (DCC) will also come into force. It will exempt Indian professionals and their employers from social security payments in the UK for up to three years, improving the cost competitiveness of Indian talent. This will ensure savings of around 20% of salary and is expected to benefit more than 60000 employees from the IT sector alone. Benefits to Indian companies and employees are expected to exceed Rs.4,000 crore.
The facilitator of this trade growth will be sharp cuts in duties on items of trade between the two countries. The CETA will allow 99% of Indian exports to enter the UK duty-free and cover almost 100% of the trade in value terms. For the UK, India will reduce or eliminate duties on 90% of the tariff lines that account for 92% of the imports.
For the UK, India’s average tariff on its products will drop from 15% to 3%, which means British companies selling products to India—from soft drinks and cosmetics to cars and medical devices—will find it easier to sell to the Indian market. Whisky producers in the UK will benefit from tariffs slashed in half, reduced immediately from 150% to 75% and then dropped even further to 40% over the next ten years.
India will reduce duties on automotives to 10% from 100% under a quota and electrical machinery from 22% to zero in certain categories. On aerospace products the duties will be reduced to zero from 11%.
In automobiles powered by an internal combustion engine in the first year of the agreement coming into force, India’s duties will come down to 30% to 50% from 110% depending on the engine capacity while the overall quota will be capped at 20,000 cars. Only in the fifth year would duties drop to 10% for all engine capacities and the quota will be 37,000. After that the quota will gradually reduce.
Duty reduction for electric vehicles comes into force from the sixth year of the agreement. The EVs costing below 40,000 pounds will have no duties and quotas. For vehicles costing more than that the import duties and quotas will apply.
The agreement also provides greater market access in IT and IT-enabled services, financial and legal services, professional and educational services, and digital trade. Indian professionals, including those deployed by companies to work in the UK across all services sectors, professionals deployed on contracts such as architects, engineers, chefs, yoga instructors, and musicians, will benefit from simplified visa procedures and liberalised entry categories, making it easier for talent to work in the UK.
Source: The Financial Express
