India-U.K. Trade Agreement (CETA): Potential to Drive FDI into India

• CETA, the India-U.K. Comprehensive Economic and Trade Agreement, aims to boost foreign direct investment (FDI) into India.

• The agreement includes a separate chapter on ‘Rules of Origin’, specifying what goods are eligible for reduced tariffs.

• The rules of origin stipulate that a product must be wholly obtained or significantly transformed through processing in either the U.K. or India.

• This ensures only genuinely British or Indian goods can access preferential tariffs under the agreement.

• The deal provides potential for foreign companies to export a particular good to the U.K. at zero duty, viewing India favorably.

• The U.K.-India FTA is expected to significantly enhance foreign direct investment in India’s precision engineering and industrial instrumentation sector.