India-UK Trade Deal: CETA May Take a Year to Kick In
How did your country report this? Share your view in the comments.
Diverging Reports Breakdown
Remainers will choke on their cornflakes: British media hails India trade deal
The India-UK Free Trade Agreement (FTA) seeks to enhance bilateral trade by around USD 34 billion annually, besides ensuring better market access. The pact was inked by Commerce Minister Piyush Goyal and his UK counterpart Jonathan Reynolds in the presence of Prime Minister Narendra Modi and his British counterpart Keir Starmer. Many British media outlets have chosen to frame it as a key post-Brexit win, made possible only because the UK is no longer a member of the European Union. The one aspect of the deal that has some sections of the media striking a note of concern is the Double Contributions Convention (DCC), which will be enforced along with the FTA. The deal means Indian workers employed by an India-based employer will be able to work in the UK for up to three years without paying National Insurance. They will continue to pay into Indian social security during that period, with reciprocal rules in place for UK workers who go to India. The Financial Times, meanwhile, did flag the automotive sector’s muted reaction to the tariff cuts agreed.
The India-UK Free Trade Agreement (FTA) or the Comprehensive Economic and Trade Agreement (CETA) seeks to enhance bilateral trade by around USD 34 billion annually, besides ensuring better market access.
advertisement
The pact was inked by Commerce Minister Piyush Goyal and his UK counterpart Jonathan Reynolds in the presence of Prime Minister Narendra Modi and his British counterpart Keir Starmer, whose government pegged it as a landmark deal, which secured thousands of British jobs and export wins.
Many British media outlets have chosen to frame it as a key post-Brexit win, made possible only because the UK is no longer a member of the European Union (EU) – an economic bloc that has had many stops and starts with negotiating an FTA with India over decades.
All major UK publications had images of the beaming prime ministers and their trade ministers emblazoned alongside largely exuberant headlines resonating the central theme around the mood music of warm hugs and cups of tea shared between Modi and Starmer at Chequers, the countryside residence of the British PM.
“Britain’s bumper trade deal with India will have remainers choking on their cornflakes this morning. Not only was it made possible by leaving the EU, it shows that Brexit is well and truly working,” notes a ‘Daily Express’ article entitled ‘One reason why multi-billion-pound Brexit trade deal with India is good for Britain’.
‘The Times’ analysis concludes that Britain’s trade deal with India is “worth the effort” because it “opens the door to a market that could be second only to China’s by 2050.”
Harking back to Anglo-Indian trade of pre-independence times, when Mahatma Gandhi took to spinning Khadi to boycott foreign-made cloth, the newspaper highlights how the tables turned as India overtook Britain to become the world’s fifth-largest economy in 2022.
“On average, Indian tariffs on British goods will be reduced from 15 per cent to 3 per cent. Ministers forecast the deal will boost GDP by GBP 5 billion by 2040. That may be small beer given UK national output of GBP 2.56 trillion, but it does not take account the deepening ties illustrated by the agreement and the potential for ever greater trade liberalisation,” it notes.
‘The Financial Times’, meanwhile, largely optimistic in its coverage of PM Modi’s visit to the UK, which revolved almost entirely around the FTA or CETA as it is christened, did flag the automotive sector’s muted reaction to the tariff cuts agreed.
advertisement
“British carmakers have been left underwhelmed by the UK-India trade deal signed on Thursday, with industry figures saying ‘very difficult’ last-minute talks between London and New Delhi had resulted in a watered-down accord,” the newspaper states.
The concern is around UK petrol and diesel car tariffs not falling to a headline 10 per cent rate until 2031 and a tight cap on the number of cars they can sell in the Indian market tapering “markedly” between 2031 and 2046.
“Carmakers were still relatively optimistic about the deal, given that tariff rates are set to come down,” it adds.
The one aspect of the deal that has some sections of the media striking a note of concern is the Double Contributions Convention (DCC), which will be enforced along with the FTA.
“The deal means Indian workers employed by an India-based employer will be able to work in the UK for up to three years without paying National Insurance. They will continue to pay into Indian social security during that period, with reciprocal rules in place for UK workers who go to India,” notes ‘The Daily Telegraph’.
advertisement
“The deal comes a matter of months after Labour imposed higher National Insurance on British companies and follows calls from within Labour for the party to toughen its immigration stance amid the rise of Reform UK,” it states.
The newspaper goes on to quote Prime Minister Modi’s statement on how the DCC will “inject new energy into the service sectors of both countries” and the UK economy will “benefit from India’s skilled talent”, implying an unwelcome impact on migration statistics.
“There is, of course, a dark lining to every silver cloud, and in the case of the Anglo-Indian deal, it is the fear that an arrangement exempting Indians working temporarily in this country from paying national insurance could result in British workers being undercut One to watch,” concludes ‘The Times’ analysis.
The FTA targets a doubling of bilateral trade to USD 120 billion by 2030. Following Indian Cabinet approval and the formal signing, the deal progresses to its UK Parliament ratification process, which is expected to take up to a year.
– Ends
Published By: Avijit Das Published On: Jul 25, 2025
Tune In
India–UK FTA Deal: Will Luxury Cars Get Cheaper?
The India–UK Free Trade Agreement (also known as CETA) marks India’s first comprehensive trade deal with a major European economy. The pact eliminates tariffs on 99% of Indian exports to the UK, while Indian tariffs on British goods including luxury autos will gradually drop from over 100% to around 10% under quota, over a decade or more. Initially, vehicles like the Mini Cooper and Defender (built abroad) could see a 30–40% price cut. However, the benefits apply only to top-end ICE cars and high-end EVs priced above £80,000 (CIF) and under an annual quota projected at 20,000 units initially, rising over time. In short: yes, some foreign cars may go cheaper but key made-in-India segments remain firmly same.
Cheaper Luxury Cars in India
Perhaps the most headline-grabbing impact? Signed-off import duties on British luxury vehicles from Jaguar, Land Rover, Rolls-Royce, Bentley, Aston Martin, to McLaren falling to 10% within quota limits. Initially, vehicles like the Mini Cooper and Defender (built abroad) could see a 30–40% price cut, dropping from around ₹45 lakh to ₹27–₹32 lakh levels in year one. However, the benefits apply only to top-end ICE cars and high-end EVs priced above £80,000 (CIF) and under an annual quota projected at 20,000 units initially, rising over time.
Note: Models like the Jaguar Land Rover Defender built outside the UK remain outside these concessions and may stay pricier unless locally produced.
UK Lowers Voting Age to 16: All You Need To Know
India–UK FTA Deal: What About Indian Auto Brands?
Indian firms get a major boost too Indian-made vehicles (especially EVs and auto components) now enjoy zero-duty access to the UK market, creating huge export potential for Tata Motors, Mahindra, Maruti, Royal Enfield, TVS, and Bajaj. Tata-owned Jaguar Land Rover also gains via easier re-export of India-assembled models. Two-wheeler firms like Royal Enfield and TVS could significantly scale sales in the UK market.
The agreement protects India’s mass-market automobile base, excluding vehicles priced below £40,000 (around ₹46 lakh) from tariff reductions ensuring that affordable ICE cars and mid-range EVs (the segments dominated by Indian manufacturers) remain shielded from competition. Duties for out-of-quota imports will fall gradually from 50–60% in early years to 10% after around 10–15 years, but only under annual quotas that peak at around 37,000 units by Year 15. SIAM (Society of Indian Automobile Manufacturers) praised this thoughtful framework as balancing consumer savings with domestic industry protection.
How it’s Beneficial?
Consumers looking for luxury British cars may finally see competitive pricing especially once production or imports meet quota eligibility (e.g., JLR’s India EV production).
Indian car manufacturers and component exporters can grow duty-free in UK markets, thereby increasing international footprints and exports.
Still very protected, the mass-market segment dominated by sub-₹50 lakh cars and Indian EV brands allows them to keep expanding internationally and domestically without compromise.
The India–UK FTA is a strategic win–win for Indian consumers, the promise of more affordable U.K. luxury cars. For Indian manufacturers especially in EVs and components as it unlocks broader global ambitions. Financial protections and quotas ensure the deal doesn’t undercut India’s domestic auto industry. In short: yes, some foreign cars may go cheaper but key made-in-India segments remain firmly same.
CETA signed between India and UK: What it means for students and young professionals in both countries
India and the the United Kingdom signed the Comprehensive Economic and Trade Agreement (CETA) CETA is an enabler of talent mobility, and expanded access to global opportunities. For young Indians and Britons entering a competitive workforce, the deal could be a defining tool in navigating their career trajectories. CETA’s benefits are unlikely to be instantaneous. However, for students currently enrolled in undergraduate or postgraduate. programmes, and for young professionals in the early years of employment, it provides a future-facing framework. Cross-border careers may now include smoother transitions, clearer growth ladders, and more diversified exposure. For more information on the CETA, visit: http://www.cETA.org/. For more on the Free Trade Agreement, go to: http:/www.fTA.gov.uk. for more information about the FTA, visit www.fta.org.uk for more details.
Tired of too many ads? go ad free now
While the headlines have largely focused on the projected $34 billion annual boost to trade and the reduction of import duties across key sectors, the long-term implications for students and early-career professionals in both countries are equally noteworthy.
CETA is not just a trade agreement; it is an enabler of talent mobility, skill-building, and expanded access to global opportunities. For young Indians and Britons entering a competitive workforce shaped by artificial intelligence, climate transitions, and post-pandemic economic shifts, the deal could be a defining tool in navigating their career trajectories.
A stronger pipeline for internships, apprenticeships and exchanges
The agreement is expected to expand education and training partnerships between Indian and UK institutions. Students can also expect the rise of new bilateral programmes under schemes such as the UK’s Graduate Route visa and India’s Study in India initiative. These pathways are likely to see greater alignment with industry needs, particularly in sectors such as manufacturing, green tech, digital services and pharmaceuticals, which the agreement identifies as priority areas.
As more British universities explore collaborations with Indian public and private institutions, students could benefit from joint degrees, twinning programmes and integrated internships with multinational employers. These offerings may carry greater recognition and employability value across both markets, opening new doors for those seeking global work experience early in their careers.
Boost to MSMEs may open new startup and skilling avenues
One of the core aims of the CETA is to empower Micro, Small and Medium Enterprises (MSMEs) through easier access to cross-border trade.
Tired of too many ads? go ad free now
For young professionals and entrepreneurs, this means more room to build or work in export-driven startups, particularly in sectors like textiles, chemicals, marine products, electronics, and leather.
Schemes such as India’s Skill India Mission and Startup India could now have a stronger UK-facing component. Professionals trained in high-demand domains may find more opportunities to work with British partners.
Opportunities in sustainability-linked sectors
Both countries have committed to promoting sustainability within trade. This creates additional scope for young professionals in clean energy, ESG consulting, green finance, and climate-tech solutions. British universities and research centres are already known for their work in sustainability science and policy. The trade deal could make it easier for Indian scholars and researchers to collaborate in these domains, with industry tie-ups for real-world application.
Similarly, India’s push to become a global manufacturing hub through the ‘Make in India’ campaign finds resonance in the agreement. This could lead to technical training, innovation labs, and knowledge-sharing formats that prepare students not just for employment, but for leadership in evolving industries.
Mutual recognition and smoother career mobility
Though not explicitly detailed, CETA is expected to bring improvements in the mutual recognition of qualifications.
In practice, this could reduce bureaucratic hurdles for engineers, architects, IT professionals, and financial analysts seeking roles in either country. It may also streamline short-term work visas and consulting opportunities, which are often a grey area for recent graduates.
Given that the UK remains a top destination for Indian students and India represents one of the UK’s largest higher education partner countries, the move is timely.
It aligns with a wider global trend where geopolitical relationships increasingly shape student outcomes and graduate job prospects.
A long-term shift in how career pathways are built
CETA’s benefits are unlikely to be instantaneous. However, for students currently enrolled in undergraduate or postgraduate programmes, and for young professionals in the early years of employment, it provides a future-facing framework. Cross-border careers may now include smoother transitions, clearer growth ladders, and more diversified exposure.
As Prime Minister Narendra Modi stated during the signing, this is about “paving a strong path for the future generations.” And for that generation, the students, the interns, the first-time founders, and the early-career professionals, CETA signals that international careers are no longer shaped solely by university choices or job market fluctuations. They are increasingly tied to the policies that define where talent can thrive.
TOI Education is on WhatsApp now. Follow us
.
India-UK FTA: Import of Britain-made luxury cars to get cheaper
The India-UK Comprehensive Economic and Trade Agreement (CETA) introduces tariff-rate quotas (TRQ) for passenger cars and trucks. Under the agreement, tariffs on imports of internal combustion engine (ICE) cars will be slashed to 30-50 per cent in the first year of implementation. The tariffs will be reduced gradually, and after 15 years, they will become 10 per cent, with the quota set at 15,000 units. For out-of-quota imports of ICE cars, the duties are reduced to 60-95 per cent. For electric vehicles (EVs), hybrids, and hydrogen fuel-based cars, tariffs have been eliminated entirely for units priced under £40,000 CIF (cost, insurance and freight value) The agreement does not reduce duties for electric or hydrogen-based trucks.
Under the agreement, tariffs on imports of internal combustion engine (ICE) cars will be slashed to 30-50 per cent in the first year of implementation, with the benefit limited to a quota of 20,000 cars. The tariffs will be reduced gradually, and after 15 years, they will become 10 per cent, with the quota set at 15,000 units. For out-of-quota imports of ICE cars, the duties are reduced to 60-95 per cent in the first year, and further to 45-50 per cent from the tenth year onwards.
Currently, India’s import tariffs on passenger vehicles range from 70-110 per cent while those on trucks stand at 40 per cent. Industry executives said that import quotas have been implemented to avoid sudden surges in imports and safeguard the Indian auto industry.
Story continues below this ad
This reduction, ranging from 16 per cent to 56 per cent over a period up to 5 years on ICE vehicles up to 2500 cc (diesel)/3000 cc (petrol) and 80 per cent to 100 per cent over a period of 5 years on ICE vehicles more than 2500 cc (diesel)/3000 cc (petrol), is expected to make high-end vehicles more accessible.
For electric vehicles (EVs), hybrids, and hydrogen fuel-based cars, tariffs have been eliminated entirely for units priced under £40,000 CIF (cost, insurance and freight value). For zero-emission cars priced between £40,000 to £80,000, tariffs are reduced to 50 per cent and a quota of 400, which from the fifteenth year will become 10 per cent and 2,000 respectively.
Story continues below this ad
For more expensive zero-emission cars (above £80,000), duties will start at 40 per cent with a quota of 4,000 units, which from the fifteenth year will become 10 per cent and 20,000 respectively. The new tariff rates are likely to benefit automakers such as Jaguar Land Rover.
It is worth noting that the agreement does not provide for reduced out-of-quota duties on zero-emission vehicles, a decision that will provide some relief to domestic EV and hybrid players.
In 2024-25, India’s car imports from the UK fell by 46 per cent to $72 million from $134 million in 2023-24.
Story continues below this ad
For ICE trucks, the tariffs are slashed to 37 per cent for the first year, with a quota of 2,500. From the tenth year onwards, tariffs drop further to 8.8 per cent, with the quota set at 3,500. The agreement does not reduce duties for electric or hydrogen-based trucks.
“The substantial reduction of import duties to 10 per cent in 5 years for UK cars represents one of the most significant outcomes of the FTA and is poised to transform the car market in India, particularly for Completely Built Units (CBUs) due to the drastic duty cut. However, it is crucial that the cars meet the originating criteria of 35 per cent of Qualifying Value Content (‘QVC’) i.e. the material of UK origin is 35 per cent of total material used,” said Saurabh Agarwal, partner and automotive tax leader at EY India.
He added that since the reduced duty benefits apply to all automobiles manufactured in factories located in the UK, non-UK carmakers may consider establishing factories in the UK to take advantage of the reduced rates and maintain their market share in India.
India-UK FTA: Aston Martin, Mini Cooper could get cheaper by up to 40% in India
The new tariff structure of the India-UK Comprehensive Economic and Trade Agreement (CETA) is implemented. Under the agreement, tariffs on imports of internal combustion engine (ICE) cars will be slashed to 30-50 per cent in the first year of implementation. The tariffs will be reduced gradually, and after 15 years, they will become 10 per cent, with the quota set at 15,000 units. In 2016, the rough CIF (cost, insurance and freight) value of the Mini Cooper S, the standard version of the popular hatchback, was $17,682 when it was imported into India in October that year. In 2025, the car retails for around $30,000 (Rs 26 lakh in 2025) in the U.S., suggesting a markup over its rough Cif of a little over $5,000. The car’s current CIF value could be around $320,000 in India.
Under the agreement, tariffs on imports of internal combustion engine (ICE) cars will be slashed to 30-50 per cent in the first year of implementation, with the benefit limited to a quota of 20,000 cars. The tariffs will be reduced gradually, and after 15 years, they will become 10 per cent, with the quota set at 15,000 units. For out-of-quota imports of ICE cars, the duties are reduced to 60-95 per cent in the first year, and further to 45-50 per cent from the tenth year onwards.
In 2016, the rough CIF (cost, insurance and freight) value of the Mini Cooper S, the standard version of the popular hatchback, was $17,682 when it was imported into India in October that year, according to data from a trade intelligence platform. In 2016, the car retailed for around $23,000 in the USA, suggesting a markup over its rough CIF of a little over $5,000. In 2025, the car retails for around $30,000 (Rs 26 lakh in 2025) there.
Story continues below this ad
In India, the base version of the car starts from around Rs 45 lakh currently, since it currently incurs a duty of about 70 per cent, which amounts to Rs 13.5 lakh. Based on these figures, the rough CIF of the Mini Cooper that’s imported into India from the UK currently could be around Rs 21 lakh ($24,000).
So, when the new tariff rates, facilitated by the CETA kick in, the duty on the Mini Cooper could go down from the current 70 per cent to between 30-50 per cent. At 30 per cent, the car could cost Rs 27.3 lakh, down from the current Rs 45 lakh, a saving of nearly 40 per cent. At 50 per cent, the car could cost Rs 31.5 lakh, which would still be a saving of 30 per cent. These are the initial rates, and prices could fall in subsequent years when the duty reduces further.
Story continues below this ad
Similarly, in 2016, an Aston Martin Vanquish was imported in India at a CIF value of $214,607, as per data available with the trade platform, and in that year, the car retailed for around $290,000. Adjusting for currency changes and some inflation, the car’s current CIF value could be around $320,000 (Rs 2.8 crore).
Currently, the car retails in India for Rs 8.85 crore, and it is understood to attract at least 100 per cent in customs duty, amounting to around Rs 4.5 crore. When this duty is reduced to 50 per cent, that could lower the sticker price of the car to Rs 6.7 crore, which would be cheaper by around 24 per cent.
It needs to be noted that these rough calculations do not account for fluctuations in demand or production costs, company markup, currency differentials and inflation. Aston Martin and BMW (the parent company of Mini) did not respond to an immediate request for comment.
Story continues below this ad
Currently, India’s import tariffs on passenger vehicles range from 70-110 per cent while those on trucks stand at 40 per cent. Industry executives said that import quotas have been implemented to avoid sudden surges in imports and safeguard the Indian auto industry.
The duty reduction, ranging from 16 per cent to 56 per cent over a period up to 5 years on ICE vehicles up to 2500 cc (diesel)/3000 cc (petrol) and 80 per cent to 100 per cent over a period of 5 years on ICE vehicles more than 2500 cc (diesel)/3000 cc (petrol), is expected to make high-end vehicles more accessible.
For electric vehicles (EVs), hybrids, and hydrogen fuel-based cars, tariffs have been eliminated entirely for units priced under £40,000 CIF (cost, insurance and freight value). For zero-emission cars priced between £40,000 to £80,000, tariffs are reduced to 50 per cent and a quota of 400, which from the fifteenth year will become 10 per cent and 2,000 respectively.
Source: https://www.deccanherald.com/india/at-least-a-year-before-india-uk-trade-deal-is-operational-3649492