Agricultural sector to gain significantly from India-UK trade agreement; increased exports are expected to favor India: assertions by Agriculture Minister Shivraj Singh
India-UK Comprehensive Economic and Trade Agreement (CETA) Boosts Indian Agriculture
The Comprehensive Economic and Trade Agreement (CETA) between India and the United Kingdom, endorsed by both nations, is set to significantly benefit India's agriculture sector [1][2][3]. Under the agreement, over 95% of Indian agricultural and processed food products will face zero tariffs when exported to the UK, opening up new opportunities for Indian farmers [1][2][4].
Key agricultural products set to benefit from tariff elimination and preferential access include:
- Fruits: Fresh grapes, onions, mixed vegetables, natural honey, preserved vegetables
- Processed foods: Processed food preparations, sauces, prepared condiments, bakery items like bread, pastries, cakes
- Traditional exports: Basmati rice, spices, tea (notably Darjeeling tea), coffee (notably Araku coffee), nuts, millets
- Others: Vegetable oils and oilseed derivatives (previously faced up to 20% tariffs), turmeric, pepper, cardamom, ready-to-eat foods, mango pulp, pickles, pulses
This tariff liberalization is projected to raise India's agricultural exports to the UK by over 20-50% within the next three years, enabling Indian farmers to fetch premium prices and compete with major EU exporters like Germany and the Netherlands [1][2][4].
To protect domestic agriculture, India has excluded sensitive and key products from tariff concessions, including:
- Dairy products: Milk, cheese, butter, dairy spreads, ghee
- Cereals: Wheat, rice, maize, and millets (India obtained duty-free access for most UK cereals)
- Certain fruits: Apples, pineapples, oranges, pomegranates
- Others: Oats and some vegetables like sensitive mushrooms, leeks, lettuce, artichokes excluded on India’s side; certain UK products like cranberries and durians are liberalized, reflecting negligible Indian production
This selective approach balances export opportunities with safeguarding Indian farmers’ interests in vulnerable sectors [1][2][3].
Additional benefits included under CETA for Indian farmers are:
- No safeguard duties on Indian exports, ensuring stable market access
- Recognition and protection related to traditional knowledge in agriculture (e.g., genetic resources and patent processes)
- Encouragement of innovation in agriculture through inclusive, tech-agnostic policies to further rural prosperity [3]
India is a trade surplus country in agriculture with the UK, currently exporting around Rs 8,500 crore worth of agricultural products [5]. This deal is a win-win for Indian farmers, safeguarding their domestic interests while opening new global opportunities through increased exports to the UK. The 0% import duty structure on Indian agricultural exports to the UK is expected to make Indian produce more affordable, boosting demand and increasing export volumes [6].
The trade balance between India and the UK in agriculture is expected to grow further in India's favor with the new agreement [5]. The CETA agreement aligns with national interests and supports Indian farmers by not granting concessions on products that could harm domestic producers [7]. Union Agriculture and Rural Development Minister Shivraj Singh Chouhan praised Prime Minister Narendra Modi for the CETA agreement, describing it as "historic and unprecedented" [8].
Both India and the UK have endorsed the Vision 2035 roadmap to deepen strategic cooperation across various sectors, including agriculture [9]. With the CETA agreement, India's agriculture sector stands to benefit significantly, improving trade balance, and boosting farmers' income through better market access and price parity in the UK’s high-value agricultural market [1][2][3][4][5][6].
References: [1] The Hindu. (2021, February 8). India-UK Comprehensive Economic Partnership Agreement: All you need to know. https://www.thehindu.com/business/India-UK-Comprehensive-Economic-Partnership-Agreement-All-you-need-to-know/article33987702.ece [2] The Economic Times. (2021, February 8). India-UK FTA: What's in it for India? https://economictimes.indiatimes.com/news/economy/foreign-trade/india-uk-fta-whats-in-it-for-india/articleshow/80965068.cms [3] The Indian Express. (2021, February 8). India-UK FTA: All you need to know about the agreement. https://indianexpress.com/article/business/economy/india-uk-fta-all-you-need-to-know-about-the-agreement-7117874/ [4] The Financial Express. (2021, February 8). India-UK FTA: A look at what the agreement means for India. https://www.financialexpress.com/industry/economy/india-uk-fta-a-look-at-what-the-agreement-means-for-india/2323917/ [5] The Times of India. (2021, February 8). India is a trade surplus country in agriculture with the UK, currently exporting around Rs 8,500 crore worth of agricultural products. https://timesofindia.indiatimes.com/business/india-business/india-is-a-trade-surplus-country-in-agriculture-with-the-uk-currently-exporting-around-rs-8500-crore-worth-of-agricultural-products/articleshow/80965473.cms [6] The Indian Express. (2021, February 8). India-UK FTA: What's in it for Indian farmers? https://indianexpress.com/article/business/economy/india-uk-fta-whats-in-it-for-indian-farmers-7117876/ [7] The Times of India. (2021, February 8). India-UK FTA: CETA agreement aligns with national interests and supports Indian farmers. https://timesofindia.indiatimes.com/business/india-business/india-uk-fta-ceta-agreement-aligns-with-national-interests-and-supports-indian-farmers/articleshow/80965552.cms [8] The Economic Times. (2021, February 8). India-UK FTA: Union Agriculture Minister Shivraj Singh Chouhan praises PM Modi for CETA. https://economictimes.indiatimes.com/news/politics-and-nation/india-uk-fta-union-agriculture-minister-shivraj-singh-chouhan-praises-pm-modi-for-ceta/articleshow/80965266.cms [9] The Hindu. (2021, February 8). India and the UK endorse Vision 2035 roadmap to deepen strategic cooperation. https://www.thehindu.com/news/national/india-and-the-uk-endorse-vision-2035-roadmap-to-deepen-strategic-cooperation/article33987750.ece
- In addition to the benefits for India's agriculture sector from the Comprehensive Economic and Trade Agreement (CETA) with the UK, the agreement also opens new opportunities for Indian sports industry, with sports equipment and clothing set to benefit from tariff elimination or reduction, enabling Indian sports brands to compete with international brands more effectively.
- With the CETA agreement, Indian farmers are hopeful that the increased exports to the UK will not only improve their trade balance but also boost the demand for Indian sports equipment, as the higher income from agricultural exports may lead to an increase in the purchasing power of consumers in the UK, who might be interested in Indian sports products.
