India-UK CETA marks a paradigm shift in India's FTA strategy with developed economies. Discuss its implications for labour-intensive exports and services mobility.

Q. India-UK CETA marks a paradigm shift in India's FTA strategy with developed economies. Discuss its implications for labour-intensive exports and services mobility. (15 marks, 250 words)

Signed on 24 July 2025 and entering into force on 15 July 2026, the India-UK Comprehensive Economic and Trade Agreement (CETA) is India's first FTA with a G7 economy, moving India's trade strategy from defensive tariff-only pacts toward deep, services-and-mobility deals with advanced markets [1][2].

A paradigm shift - Unlike goods-centric ECTA/CEPA, CETA is a 30-chapter deal spanning goods, services, digital trade, procurement and social security [2]. - Paired with a Double Contribution Convention (DCC), it treats labour mobility as a core deliverable, not a footnote [1]. - Anchors India-UK Vision 2035, signalling confidence to negotiate binding disciplines with developed economies [2].

Labour-intensive exports - Zero-duty on ~99% of India's export tariff lines (~100% of trade value) [1]. - Direct gains for MSME-heavy sectors—textiles, leather, footwear, marine, gems & jewellery, toys [2]. - Seafood exports projected to rise ~70%, boosting coastal employment [3].

Services mobility - Commitments across 12 major service sectors and 137 sub-sectors, covering >99% of India's services export interest [1][2]. - DCC exempts Indian professionals from UK social-security contributions for 5 years (up from 3), aiding >75,000 workers and >900 firms [1][4]. - Deepens Mode-1/Mode-4 exports in IT/ITES and professional services [2].

By coupling tariff elimination with mobility guarantees, CETA converts market access into jobs and skilled-services growth. If matched by supply-side readiness (PLI, rules-of-origin compliance), it can double bilateral trade by 2030 and advance Viksit Bharat @2047 [2].

(~250 words)

Sources: 1. India–UK Next Generation Economic Corridor: CETA & Social Security Agreement to Enter into Force 15 July 2026 — PIB — entry-into-force date, 99% tariff lines, 12 sectors/137 sub-sectors, DCC 5-year exemption, 75,000+ beneficiaries 2. India and UK Sign CETA — PIB — signing date, 30 chapters, labour-intensive & services sectors, Vision 2035, trade-doubling target 3. India's Seafood Industry Poised to Ride CETA Wave — PIB — ~70% seafood export growth 4. India–UK CETA Press Note — PIB — DCC beneficiaries: >75,000 professionals, >900 companies