25-July-2025 Daily Answer Writing
Q1) Discuss the significance of the recent India-UK Comprehensive Economic Partnership Agreement (CETA) in the context of India’s trade policy. Analyze the potential benefits and challenges of this bilateral agreement for India’s economy, and suggest measures for ensuring inclusive growth from such pacts.
(GS Paper 2, 15 Marks, 250 Words)
Answer:
Introduction
The signing of the India-UK Comprehensive Economic Partnership Agreement (CETA) marks a milestone in India’s trade diplomacy, reflecting an ambition to deepen economic ties and diversify trade partnerships amid shifting global dynamics.
Significance in India’s Trade Policy
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Diversification of Partners: The deal signals India’s strategy to pursue bilateral and plurilateral agreements for greater economic integration beyond traditional partners.
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Template for Future Agreements: CETA may serve as a model for India’s ongoing negotiations with the EU and the US, showcasing India’s willingness to liberalize select sectors while protecting sensitivities.
Potential Benefits for India
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Market Access: The pact eliminates or significantly reduces tariffs on Indian exports such as textiles, tea, and coffee, enhancing competitiveness in the UK market.
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Attracting Investment: Eased regulations and stronger legal frameworks under CETA can boost foreign direct investment and technology inflows.
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Job Creation and MSME Growth: Sectors like agriculture, fishing, and small manufacturing are poised to benefit, providing opportunities for youth and MSMEs.
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Economic Growth: Increased bilateral trade is expected to foster higher GDP growth and strengthen supply chains.
Challenges of the Agreement
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Exposure to Competition: Domestic producers may face greater competition from UK imports in sensitive sectors.
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Implementation Barriers: Ensuring compliance with regulatory standards and seamless customs processes requires upgrading infrastructure and administrative capacity.
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Exclusion of Sensitive Sectors: Agriculture and some manufacturing segments remain partially protected, limiting broad-based benefits.
Measures for Inclusive Growth
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Capacity Building: Support MSMEs and farmers in tapping export opportunities through targeted schemes and training.
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Responsive Safeguards: Monitor sectors at risk and deploy timely safeguards against unfair trade practices.
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Policy Coordination: Harmonize industrial, trade, and labor policies to maximize positive outcomes from the pact.
Conclusion
The India-UK CETA represents a forward-looking approach in India’s trade strategy. By addressing accompanying challenges and enhancing domestic capabilities, India can harness such agreements to drive inclusive, sustainable growth.
