Standards Over Tariffs: Why India Must Surge Through Certification To Harness UK Trade Agreement

Standards Over Tariffs: Why India Must Surge Through Certification To Harness UK Trade Agreement​

The Comprehensive Economic and Trade Agreement (CETA) between India and the UK, set to begin July 15, represents a significant market opportunity for Indian businesses. However, economic think tank GTRI cautions that merely opening the trade door is insufficient; realizing the full benefits demands substantial parallel work on standards, certification, logistics, and buyer network strengthening.

GTRI emphasizes that without these supporting infrastructure improvements, much of the trade potential will remain unrealized paper promises. The agreement provides access, but converting market opportunity into actual exports requires meticulous compliance and logistical readiness from Indian firms.

Beyond the Tariff: Standards Are As Critical as Trade Deals​

The fundamental takeaway from GTRI is that standards, food-safety rules, supply-chain constraints, and certification can be just as impactful as tariff reductions in the success of international trade. The agreement's potential hinges on a complex convergence of three factors: strong Indian export capacity, significant UK demand, and meaningful tariff removal by CETA.

The think tank’s analysis highlights that while the agreement is positive, market penetration across many key sectors remains low. For instance, in 2025, the UK imported $15.2 billion from India out of a global total of $928.9 billion, constituting only a 1.6 per cent share. Similarly, Britain purchased merely 3.4 per cent of India's $445 billion global exports.

Labor-Intensive Sectors Show Highest Growth Potential​

Sectors built on labour-intensive goods and established production chains exhibit the strongest prospects for growth under CETA. These include garments, textiles, leather and footwear, processed foods, seafood, and selected farm products.

In the ready-to-eat food space, strong potential exists due to high UK demand coupled with low Indian penetration. The UK imported $33.4 billion in processed foods, receiving only $354 million from India, which equates to a 1.1 per cent market share. This area demands strict focus on labelling, traceability, and food safety compliance.

Garments remain a promising area of engagement. In 2025, the UK imported $21.3 billion in garments, among which India supplied $1.3 billion, capturing a 6.1 per cent market share. Furthermore, established buyer relationships exist, as the UK already purchases 8 per cent of India’s global garment exports.

Navigating Challenges in Auto and Heavy Industries​

The automotive sector and specialized manufactured goods are poised for potential gains, but significant hurdles remain regarding technical standards and rules-of-origin. The UK imported $92.2 billion worth of items from the auto sector, receiving $325 million from India, which represents a negligible 0.4 per cent share against India's $25.1 billion global exports.

Chemicals and pharmaceuticals also face compliance barriers despite strong Indian production capacity. For instance, India exported $40 billion in chemicals globally but only supplied $908 million of the relevant $35.2 billion UK market. In pharmaceuticals, India’s global export was $25.8 billion, yet it provided just $1 billion to the UK market, or 3.2 per cent.

Safeguards and Limited Gains in Key Commodities​

The analysis also highlighted several commodities where a trade pact does not automatically secure market access due to stringent protection measures in the receiving market. This is evident in iron and steel products, for example. While India exported $20.5 billion globally, it supplied $959 million to the UK, securing a 5.2 per cent share.

However, GTRI noted that this sector faces intense headwinds from the UK’s tighter steel safeguard regime, high above-quota tariffs, and reduced quotas, factors which can easily overpower CETA preferences. A similar scenario exists in the alcohol market; the UK imported $10.9 billion globally but only received $7 million from India, reflecting weak export scale and limited brand presence rather than tariff barriers.