Trade to climate: Modi, Starmer set to discuss 'Vision 2035' this week

Prime Minister Narendra Modi and his counterpart from the United Kingdom, Keir Starmer, will take stock of the opportunities presented by the India-UK Comprehensive Economic and Trade Agreement (CETA) at their forthcoming discussion in Mumbai later this week.

 

The deal was signed between the two countries on July 24 in London.

 

Starmer will be in India on October 8 and 9, and meet Modi in Mumbai on Thursday, during which they will review the India-UK ‘Vision 2035’, which is a focussed and time-bound 10-year road map of programmes and initiatives in trade and investment, technology and innovation, defence and security, climate and energy, health, education and people-to-people relations, India’s Ministry of External Affairs said on Saturday.

 

 

The Indian side believes that there are certain sub-sectors with untapped potential for export to the UK from India, which include jewellery and precious metals with current exports worth $902 million, machinery and electronic goods ($800 million), motor vehicles and parts ($775 million), apparel ($618 million) and chemicals ($482 million).

 

The two will also engage with businesses and industry leaders on opportunities presented by the India-UK CETA as a central pillar of the future India-UK economic partnership. The two PMs will also attend sixth edition of the Global Fintech Fest in Mumbai and deliver keynote addresses.

 

During Modi’s visit to the UK in July, apart from the CETA, the two countries signed the ‘double contribution convention’, the ‘Vision 2035’ document and the new defence industrial road map. The key pillars of India-UK Vision 2035 are growth and jobs in the UK and India, partnership in education, skills, research, critical minerals, semiconductors, defence and security, among other sectors.

 

The ‘double contributions convention’ provides a three-year exemption from social security contributions for Indian workers temporarily working in the UK and their employers. It promises to benefit more than 75,000 workers contributing around 25 per cent of their annual salary. Indian officials maintain that New Delhi has secured favourable mobility provisions for skilled Indian professionals, and independent professionals like yoga instructors, musicians, and chefs. Importantly, dependents of transferees with work authorisation will also benefit.

 

For India, CETA offers unprecedented market access to the UK. It ensures duty-free access to the UK market for approximately 99 per cent of Indian exports by value, and is expected to help labour intensive sectors, such as textiles, marine products, leather, footwear, gems and jewellery.

 

Sectors like engineering goods, auto parts and engines, and organic chemicals will also benefit from greater market access, as will the services sector, including financial services, professional services, education, and other business services.

 

The agreement establishes mechanisms to address non-tariff barriers, ensuring smoother flow of goods and services and preventing unwarranted restrictions on Indian exports. The trade agreement will also attract greater investment flows between both countries, leading to economic growth and job creation.

 

For the UK, key benefits include greater access to India’s large and growing market, tariff reductions on whisky and gin, automobiles, cosmetics, aerospace components, lamb, and medical devices. The agreement ensures that UK financial services companies are treated equally to domestic suppliers in India. Other suggested additional areas of collaboration are connectivity and transport, critical and emerging technologies and pharmaceuticals.

 

India’s bilateral trade with the UK (in both goods and services) stood at almost $56 billion in 2024, with a target to double this by 2030. Of this, the total merchandise trade is $23 billion and total services trade is of $33 billion. India exported over $19.8 billion in services to the UK in 2023.

 

India’s principal commodities of export to the UK in 2024-25 were telecom, instruments, petroleum products, electric machinery and equipment, cotton, including accessories and drug formulations.

 

India’s top principal commodities of import from the UK in 2024-25 were silver, electric machinery and equipment, iron and steel, aluminium, products of aluminium and alcoholic beverages.

 

The UK’s top-five export destinations (2024) were the US (13.9 per cent), China (9.1 per cent), Germany (7.6 per cent), Netherlands (6.6 per cent) and Ireland (5.7 per cent). The UK’s top-five import sources in 2024 were China (12.1 per cent), USA (11.3 per cent), Germany (9.4 per cent), France (4.8 per cent), and Italy (3.9 per cent).