Page 30 - Banking Finance September 2025

A R T IC L E
ARTICLE
particular promise. India exported marine goods worth Investments and Public Procurement: A
US$8.09 billion in 2022-23, with shrimp and cuttlefish being
major components. The UK, with its large Indian diaspora Wider Canvas
and strong demand for seafood, is an attractive destination. Beyond goods and services, the CETA also addresses invest-
Tariff elimination under CETA makes Indian seafood more ments and procurement. UK companies will now be eligible
price-competitive and enhances the earning potential of to participate in India's public procurement markets for non-
exporters. This will directly benefit coastal economies in sensitive sectors, which are valued at over £38 billion annu-
states like Andhra Pradesh, Kerala, and Gujarat, where ally. This creates opportunities for UK firms in infrastructure,
marine exports are a major livelihood source. clean energy, and services. For Indian banks, such partici-
pation means increased demand for project finance, guar-
Pharmaceuticals and chemicals are another sector to watch. antees, and treasury services.
India is already a global leader in generic medicines and
enjoys strong trust in the UK market. With tariff-free access, Conversely, Indian companies investing in the UK will ben-
Indian pharma companies will find it easier to penetrate efit from clearer frameworks and dispute-resolution mecha-
deeper into the British healthcare supply chain. This aligns nisms. The deal strengthens investor confidence, which is
with the UK's need to ensure affordable healthcare costs critical for long-term capital flows. As investment linkages
post-Brexit, creating a win-win situation. Similarly, India's
grow, banks on both sides will find increased demand for
engineering goods and machinery exports, which cater to
advisory services, cross-border financing, and capital mar-
industries ranging from automotive to power equipment,
kets access.
will see higher demand as UK tariffs reduce significantly. This
can catalyse new investments in India's engineering hubs Projected Impact on Trade and GDP
such as Pune, Ludhiana, and Coimbatore.
The macroeconomic benefits of CETA are compelling. Bilat-
eral trade between India and the UK currently stands at
Services Sector and Professional Mobility
around US$56 billion, but both governments have projected
While much of the public discourse around trade agreements this to double to US$112 billion by 2030. According to KPMG,
focuses on goods, the services sector is no less important, the deal could add £4.8 billion annually to UK GDP and ex-
especially for India. The CETA creates new opportunities for pand bilateral trade by £25.5 billion. For India, the govern-
Indian IT, ITeS, finance, and education services by providing
easier access to the UK market. Indian professionals will find ment estimates that duty-free access could unlock US$23
smoother pathways to work in the UK, supported by provi- billion worth of new export opportunities.
sions on mobility and tax exemptions for social security con-
tributions for up to three years. The rationale behind these figures lies in the scale of tariff
reduction. For example, average tariffs on British goods
This is significant for two reasons. First, India's services ex-
ports to the UK-already substantial-will gain momentum as
restrictions ease. Second, the mobility provisions will encour-
age Indian firms to deploy talent overseas without facing
prohibitive compliance costs. For the banking industry, this
increased movement of professionals creates new avenues
in remittances, cross-border payroll services, and overseas
banking support.

The UK, on its part, gains better access to India's financial
and education sectors. British universities can more easily
collaborate with Indian institutions, while UK financial firms
can tap into India's fast-growing financial ecosystem. This
exchange of services will lead to greater integration of the
two economies and richer banking interactions.

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