The Comprehensive Economic and Trade Agreement (CETA) between the UK and India, signed on July 24, 2025, marks a significant step in strengthening economic ties between the two nations. A key aspect of this agreement is the provision allowing UK firms to offer telecom, construction, and related services in India without the necessity of establishing a local office. This provision grants British companies the same treatment as their Indian counterparts, fostering a level playing field and promoting fair competition.

Key Benefits and Implications

• Level Playing Field: By removing the requirement for a local presence, the CETA ensures that UK companies are treated on par with Indian firms in the telecom and construction sectors. This eliminates a significant barrier to entry, making it easier for UK businesses to compete in the Indian market.
• Expanded Market Access: The agreement opens up significant opportunities for UK service providers to tap into India's growing market. With a burgeoning economy and increasing demand for quality services, India presents a lucrative destination for UK firms in the telecom and construction industries.
• Boost to India's Services Sector: India's commitment to opening its market access in areas like professional, business, financial, and environmental services is expected to facilitate investments and technology transfer into the country. This, in turn, will boost India's potential to serve global markets and enhance its competitiveness.
• Increased Trade and Investment: The CETA is anticipated to significantly boost bilateral trade and investment between the UK and India. By reducing trade barriers and promoting greater collaboration, the agreement is poised to unlock new opportunities for businesses and create jobs in both countries.
• Mutual Recognition of Qualifications: Recognizing the importance of skilled professionals, the agreement includes provisions for the mutual recognition of professional qualifications in select fields like law and accounting. While legal services remain closed, both countries have agreed to engage in a time-bound manner to address the recognition of qualifications.
• Government Procurement Opportunities: The Government Procurement (GP) chapter of the CETA provides Indian suppliers with increased access to the UK's public procurement market, estimated at over 90 billion pounds annually. Indian firms can compete for a wide range of goods, services, and construction service contracts. The UK has also offered access to procurement by entities such as Belfast Metropolitan College, Northern Regional College and North West Regional College, which are not offered to all trading partners.

Specifics of the Agreement

Under the CETA, India has committed to opening 108 sub-sectors of services to British firms, including accounting, environmental services, and auxiliary financial services. The UK, in turn, will grant Indian companies access to 137 sub-sectors, covering nearly all of India's current services exports. These include key areas such as IT, business services, management consultancy, accountancy, engineering, telecom, financial services, education, and health.

India's services exports to the UK are valued at USD 19.8 billion, while imports stand at USD 13.2 billion. The agreement aims to further enhance this trade by providing easier access and reducing barriers on both sides.

Safeguards and Considerations

While the CETA opens up significant opportunities, it also incorporates safeguards to protect sensitive sectors and domestic industries. India's offer includes only non-sensitive procurement at the central level, excluding sensitive ministries/departments such as the Ministry of Defence and Ministry of Home Affairs.

Looking Ahead

The CETA is currently awaiting approval from the British Parliament, and it may take up to a year before its provisions come into effect. Once implemented, the agreement is expected to usher in a new era of economic partnership between the UK and India, fostering growth, innovation, and job creation in both countries.