Page 28 - Banking Finance September 2025

ARTICLE

India-UK CETA: A

Turning Point for

Trade and Banking

Growth Gaurang Aggarwal

Chief Manager & Faculty
Union Bank of India
Union Learning Academy, Corporate &
Treasury, Gurugram

According to recent trade figures, India's exports to the UK stood at US$14.55 billion in 2024-25,
reflecting a growth of 12.09 percent from the previous year. With CETA in force, this growth trajectory
could accelerate sharply. This graph visually reinforces the upward export trend.

O n 29 July 2025, India and the United Kingdom such as textiles, leather goods, gems and jewellery, marine
products, and engineering goods, which have traditionally
signed the Comprehensive Economic and Trade
been subjected to tariff barriers in the UK. For exporters in
Agreement (CETA), marking a historic milestone
in the economic partnership between the two countries. these categories, the removal of tariffs translates into di-
This agreement comes at a time when India is aiming to rect cost advantages, making their products more competi-
integrate more deeply with global markets and the UK is tive in global markets.
seeking to strengthen its post-Brexit trade architecture. To-
gether, these two democracies have unlocked a framework Take, for example, the Indian textile and apparel sector. The
that not only addresses tariffs and trade in goods, but also UK is one of the top destinations for Indian garments, yet
tariffs often made Indian exports costlier than those from
services, investments, mobility, and institutional coopera-
tion. For India, the deal holds the promise of a stronger competing countries such as Bangladesh or Vietnam. With
tariffs gone, Indian textile exporters can now offer better
export trajectory and expanded opportunities for its micro,
prices without compromising on margins. This will likely lead
small and medium enterprises (MSMEs). For the banking
sector, it represents a chance to anchor itself more firmly to an expansion in orders, higher capacity utilization in
manufacturing units, and, crucially, greater employment
as a growth partner in international trade and corporate
generation in regions where textiles form the backbone of
finance.
the local economy.
The Promise of Tariff Elimination According to recent trade figures, India's exports to the UK

One of the most important provisions of the CETA is the stood at US$14.55 billion in 2024-25, reflecting a growth of
near-elimination of tariffs between India and the UK. India 12.09 percent from the previous year. With CETA in force,
will now enjoy tariff-free access for almost 99 percent of its this growth trajectory could accelerate sharply. This graph
exports to the UK. This includes labour-intensive industries visually reinforces the upward export trend.

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