India-UK Free Trade Agreement Comes Into Effect

The India-UK Comprehensive Economic Partnership Agreement (CEPA) has come into effect following formal operationalization announced by outgoing UK PM Keir Starmer at the G7 Summit in France. This represents the first major bilateral FTA negotiated post-Brexit by the UK and signals India's growing economic clout in global trade architecture.

Background: Negotiations began in 2022 after UK's departure from EU. The agreement includes tariff elimination on key sectors, services liberalization, investment protections, and social security coordination. Current two-way trade stands at £48 billion; the FTA is projected to increase this by over £25 billion annually in the long term.

Key provisions: Goods trade liberalization (90%+ tariffs to be eliminated), services access expansion, movement of professionals (especially IT workers), intellectual property protections, and labor/environmental standards. The social security agreement ensures Indian workers' pension benefits portability.

Why it matters: Demonstrates India's strategic autonomy and ability to negotiate favorable trade terms. Shows India-UK partnership beyond historical ties, strengthening Indo-Pacific strategy. Benefits Indian software services, textiles, pharmaceuticals, and agricultural exports.

Exam angle: Questions on bilateral trade agreements, WTO compatibility, India's trade policy, FDI inflows, and geopolitical alignment. Likely UPSC GS-2 (International Relations) and GS-3 (Economy) topics. Comparison with India-Japan, India-UAE FTAs.