India UK FTA (CETA): Benefits, Opportunities & Impact on Indian Exporters and MSMEs

The signing of the India UK FTA (CETA), officially called the Comprehensive Economic and Trade Agreement (CETA), is being hailed as a turning point in India’s trade relations. By removing duties on key export products, simplifying trade rules, and strengthening service linkages, this deal promises to reshape the future of Indian exporters — particularly MSMEs.

I recently attended an awareness meeting organized by FIEO (Federation of Indian Export Organisations) in Guwahati, where industry stakeholders came together to understand how this deal will work in practice. The discussions highlighted that India’s Micro, Small, and Medium Enterprises (MSMEs) stand to gain significantly, especially in regions like Northeast India with its untapped potential in agri-products, handicrafts, and services.

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What the India UK FTA Really Means for MSMEs

Until now, Indian exporters often faced high UK import duties, which reduced price competitiveness compared to Bangladesh and Pakistan, who already had duty-free access. MSMEs in textiles, leather, or handicrafts found it especially difficult to compete in the UK market.

The India UK CETA changes this by:

• Eliminating tariffs on thousands of Indian products, immediately making them cheaper in the UK.
• Creating parity with Pakistan and Bangladesh in sectors like garments, leather, and seafood.
• Boosting MSME exports by lowering entry barriers, improving profitability, and making even small shipments competitive.

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India UK FTA Benefits for MSME Exporters in Northeast India

The FIEO Guwahati meeting stressed that the Northeast region — known for its natural resources and skilled artisans — is particularly well-positioned to benefit. For MSMEs, this means:

• Tea & Organic Products: Assam’s world-famous tea and organic spices can now enter the UK at 0% duty, giving smaller growers and processors better margins.
• Handlooms & Handicrafts: Traditional weavers and bamboo artisans will find global buyers more willing to source due to competitive pricing.
• Agro-processing MSMEs: Startups making packaged foods, herbal products, or bamboo-based goods can now access the health-conscious UK market more easily.
• Services Sector: MSMEs in IT, edtech, and healthcare from the region can leverage smoother digital trade provisions in the FTA.

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Products That Will See 0% Duty Under the India UK FTA

Product / Sector	Earlier UK Import Duty	New Duty Under CETA	Impact for MSMEs
Textiles & Apparel	8–12%	0%	Garment MSMEs can now compete equally with Bangladesh exporters
Marine Products (shrimp, tuna, fishmeal)	4–8.5%	0%	Boost for small seafood processors & exporters
Leather & Footwear	8%+	0%	Leather MSMEs gain new UK buyers
Engineering Goods & Auto Parts	Up to 18%	0%	Small component manufacturers gain cost advantage
Chemicals & Plastics	~10%+	0%	Specialty chemical MSMEs projected to grow exports 30–40%
Gems & Jewellery	Duties earlier applied	0%	Jewelry artisans and small manufacturers benefit
Sports Goods, Toys, Handicrafts	Varies	0%	Traditional MSME units get duty-free entry to UK

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Leveling the Field with Pakistan & Bangladesh

For decades, Indian exporters, particularly MSMEs, suffered because Pakistan and Bangladesh enjoyed preferential duty-free access in the UK. For a small garment exporter or handicraft unit, this meant Indian products often cost more than those from these neighbors, despite equal or better quality.

Now, the India UK FTA benefits ensure:

• Indian MSMEs in textiles, apparel, and leather can finally compete on equal terms.
• Marine product exporters no longer carry a tariff disadvantage.
• Buyers in the UK can choose Indian goods without cost bias, expanding opportunities for smaller exporters.

This creates not just parity but also an opportunity for India to outperform with its reputation for quality and reliability.

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Impact of the India UK Trade Deal on MSMEs

The broader impact of the India UK trade deal goes beyond trade numbers:

• Increased Export Orders – MSMEs can now attract small-volume orders from UK buyers who were earlier hesitant due to tariffs.
• More Jobs in Local Economies – Growth in textiles, handicrafts, and agro-processing will create employment in rural and semi-urban India.
• Boost to Regional MSMEs – States like Assam, Manipur, and Meghalaya can convert their unique products into global success stories.
• Encouragement for Startups – Young entrepreneurs in food, crafts, and digital services will find it easier to expand to the UK.

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Conclusion: A Turning Point for Indian MSMEs

The India UK CETA is not just another free trade agreement. It is a gateway of opportunity, especially for MSMEs who form the backbone of India’s export ecosystem.

As emphasized in the FIEO Guwahati meeting, the key for MSMEs is to act quickly:

• Identify products in the 0% duty list,
• Upgrade certifications and packaging,
• Explore partnerships in the UK,
• And leverage this deal to enter the market before competitors do.

With tariffs removed and a level playing field achieved, Indian MSMEs can finally step onto the global stage with confidence. The impact of the India UK trade deal will be felt in every workshop, weaving cluster, and agri-processing unit that dares to dream bigger.

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