India-UK CETA Trade Pact: Duty-Free Access for 99% of Indian Exports

India's Finance Ministry has notified rules for determining origin of goods under the India-UK Comprehensive Economic Partnership Agreement (CEPA). The rules enable duty-free access for approximately 99% of India's export basket to the United Kingdom, marking a significant achievement in bilateral trade liberalization.

Background: India-UK CEPA was signed in March 2022 and entered force in April 2022. It aimed to double bilateral trade from $15 billion to $30 billion by 2030. Rules of Origin (RoO) are critical specifications determining which products qualify for preferential tariff treatment. Delays in finalizing RoO rules created uncertainty for exporters.

Key Facts: (1) 99% of Indian exports get duty-free treatment; (2) Covers textiles, pharmaceuticals, engineering goods, leather, gems & jewelry; (3) RoO compliance requirements specified for value addition and source identification; (4) Estimated impact: +$5-8 billion annual trade potential; (5) Reduces customs barriers for Indian SMEs.

Export Sectors Benefiting: Textiles (largest), pharmaceuticals (generics), IT services, gems & jewelry, agricultural products, automobile components. UK gains from Indian services, pharmaceuticals, and IT talent.

Why It Matters: Strengthens India-UK strategic partnership, provides export diversification beyond US/EU markets, enhances Indian manufacturing competitiveness post-Brexit, and benefits Indian exporters through preferential market access.

Exam Angle: UPSC Mains (Trade agreements, India's external trade), GS-3. Likely MCQ: "What percentage of India's exports get duty-free access under CEPA?" Also relevant to FTA provisions, Rules of Origin concept, bilateral vs. multilateral trade.