16 Jul India-UK CETA & Social Security Pact: A New Era in Bilateral Trade
Relevance for UPSC & State PCS: International Relations
The India-United Kingdom Comprehensive Economic and Trade Agreement (CETA) and the Social Security Agreement, also known as the Double Contribution Convention (DCC), have formally come into effect, marking a significant milestone in the economic partnership between the two nations. This transformative agreement, spearheaded under Prime Minister Narendra Modi’s leadership, grants zero-duty market access to nearly 99 percent of India’s exports, encompassing almost 100 percent of the trade value. The initial day of implementation saw over 50 export consignments, valued at more than $140 million, dispatched from various Indian ports, airports, ICDs, SEZs, and factories under the preferential duty system, with the first Certificate of Origin (eCoO 2.0) issued through self-certification.
This comprehensive agreement is poised to unlock unprecedented opportunities across diverse sectors, including textiles, leather, gems and jewellery, engineering products, marine products, chemicals, and processed foods, while also benefiting MSMEs, farmers, and manufacturers. Furthermore, it opens new avenues for India’s IT, professional, financial, education, and business service sectors, enhancing the mobility of Indian talent. The Social Security Agreement specifically strengthens this partnership by exempting Indian professionals temporarily working in the UK from dual social security contributions for up to five years, thereby boosting the global competitiveness of India’s workforce.
The implementation of CETA is a testament to the extensive and complex negotiations, involving over 800 technical sessions across 14 formal rounds, reflecting the commitment of both nations to fostering a robust, innovation-driven partnership that promotes growth, investment, and shared prosperity. This agreement, going beyond previous Indian Free Trade Agreements in its breadth and depth, is expected to significantly enhance bilateral trade in both goods and services, given that services contribute over 50% to India’s GDP and over 70% to the UK’s GDP. Its true success will be measured by its impact on the lives of citizens in both countries, particularly through the creation of employment, livelihoods, and economic opportunities, with the Commerce Department actively working with industry stakeholders to translate these opportunities into tangible outcomes.
Source: PIB (Press Information Bureau)
Practice Questions
Q1. Which two agreements between India and the UK have recently come into force?
- Comprehensive Economic Partnership Agreement (CEPA) and Bilateral Investment Treaty (BIT)
- Free Trade Agreement (FTA) and Double Taxation Avoidance Agreement (DTAA)
- Comprehensive Economic and Trade Agreement (CETA) and Social Security Agreement (SSA)
- Strategic Partnership Agreement (SPA) and Defence Cooperation Agreement (DCA)
Answer
Comprehensive Economic and Trade Agreement (CETA) and Social Security Agreement (SSA) — The news title explicitly states ‘भारत–यूके सीईटीए तथा सामाजिक सुरक्षा समझौता लागू हुआ’, which translates to ‘India-UK CETA and Social Security Agreement implemented’. Therefore, CETA and the Social Security Agreement are the two agreements that have recently come into force.
Q2. What does ‘CETA’ stand for in the context of the India-UK agreement mentioned in the news?
- Common Economic and Trade Alliance
- Comprehensive Economic and Trade Agreement
- Cooperative Economic and Technological Arrangement
- Customs, Excise, and Tariff Accord
Answer
Comprehensive Economic and Trade Agreement — The term ‘CETA’ in international trade agreements typically stands for ‘Comprehensive Economic and Trade Agreement’. The news title ‘भारत–यूके सीईटीए’ confirms its usage in this context.
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