India-UK CETA to Eliminate Tariffs on Key Labour-Intensive Exports from July 15

Zero-duty access on 99% of India’s exports to the UK expected to support textiles, footwear, leather, marine products, engineering goods and other sectors

The India-UK Comprehensive Economic and Trade Agreement (CETA) is expected to provide support to major export sectors in India, particularly labour-intensive industries such as textiles, footwear, leather, marine products, processed food, engineering goods, chemicals, and pharmaceutical products, as tariffs in the UK market are scheduled to be eliminated from July 15.

According to an official, exporters in labour-intensive sectors had faced higher tariffs in the UK and competition from countries receiving zero-duty benefits through LDC status or free trade agreements with Britain.

“A number of labour-intensive exporters, who suffered high tariffs in the UK and lost out to competitors benefitting from zero duties either from LDCs or countries that had free trade pacts with Britain, will now get a level playing field. They are expected to make big gains,” an official said.

The Commerce Department stated that duties of up to 70 per cent on processed food products, up to 21.5 per cent on marine products, up to 18 per cent on engineering goods and auto components, up to 16 per cent on leather and footwear products, up to 12 per cent on textiles and clothing, and up to 8 per cent on chemicals and pharmaceutical products will be reduced to zero under the agreement.

Zero-Duty Access Covers 99% of Exports

The CETA provides zero-duty access on 99 per cent of India’s exports to the UK, covering nearly 100 per cent of trade value.

India’s textile and apparel exporters have indicated that the agreement could improve competitiveness in the UK market by removing tariff disadvantages compared with countries such as Bangladesh.

“The India-UK CETA will change that, providing us with a level-playing field so that our products can find more willing buyers as they can now be priced more attractively relative to competition. The agreement will enable our companies to significantly improve their market share not only in the top product categories of the UK’s textile and apparel imports but across the broader textile and apparel segment as well,” pointed out Ashwin Chandran, Chairman, Confederation of Indian Textile Industry.

Ashwin Chandran also said that CITI is working closely with industry and local authorities to ensure that Indian companies can effectively leverage opportunities opening through the India-UK CETA.

“The immediate duty-free access secured under CETA is expected to significantly enhance the competitiveness of Indian exports in the UK market,” the Commerce Department pointed out.