Trade Match

Prime Ministers Narendra Modi and Keir Starmer have shaken hands on a long-anticipated trade deal between India and Britain. It was not the moment many had predicted — a Labour leader celebrating a free trade agreement (FTA) that had eluded his Conservative predecessors for nearly three years.

The Comprehensive Economic and Trade Agreement (CETA), as it is formally known, promises to boost bilateral trade by $34 billion annually. India’s textiles, marine products, and engineering goods will gain near-total tariff-free access to British markets. Provisions for services, digital trade and skilled mobility, though modest, signal a willingness to deepen ties beyond goods.

That it fell to Starmer to ink the deal is as much a twist of political timing as it is a commentary on Britain’s evolving posture abroad. Negotiations that had begun under Boris Johnson had slogged on through the premierships of Liz Truss and Rishi Sunak. The latter, himself of Indian heritage, was widely expected to deliver the deal and did in fact bring the process close to conclusion. But internal pressures over immigration and looming elections froze political momentum. Labour’s clean electoral sweep, coupled with Starmer’s desire to project global seriousness, offered just enough clearance to push the pact over the line.

Both sides emerge with wins. The UK secured headline access for its whisky industry as India is the world’s largest whisky market by volume, and established a precedent-setting chapter on financial services. New Delhi agreed that British firms would not face more restrictions than Indian companies, a first for India in any trade pact. London, in turn, made some concessions on professional mobility, opening a visa route previously closed to Indian temporary workers.

For India, the gains are broader and potentially deeper. Around 99 percent of Indian exports will face zero tariffs under the deal. Agri-exports will benefit from simplified certification rules and streamlined technical barriers. Textiles and garments, long disadvantaged against rivals like Bangladesh and Cambodia who already enjoy duty-free access, will now compete on level terms in the UK’s $27 billion market. The engineering sector could double exports to the UK by 2030. Pharmaceuticals, electronics, marine products and software services stand to gain significantly.

Notably, the deal tiptoes around domestic sensitivities. India has shielded its dairy, poultry, and edible oil sectors from British imports, while the UK has kept sugar, milled rice and some animal products under existing tariffs. Labour has been careful to emphasise that the pact will not lead to wider immigration or permanent settlement pathways. Whether these guardrails hold remains to be seen.

CETA is unlikely to revolutionise trade flows overnight. India’s total goods exports to the UK still trail behind those to the UAE and the US. But symbolically, the agreement matters. It marks Britain’s most substantive FTA with a non-Western power post-Brexit. It anchors India more firmly into the UK’s Indo-Pacific trade vision. And it positions both countries — former coloniser and colony — not as supplicant and patron, but as strategic equals seeking mutual advantage.