India-UK CETA and Its Economic Impact on India: A Theoretical and Institutional Evaluation

The signing of the India–United Kingdom Comprehensive Economic and Trade Agreement (CETA) marks a historic development in bilateral trade relations, with significant implications for India's economy. This study provides a theoretical and institutional evaluation of the potential economic impact of the agreement. Drawing upon classical and modern trade theories, it examines expected benefits such as tariff liberalization, enhanced market access, trade creation, and productivity gains. The analysis further considers the institutional dimensions of the agreement, including regulatory alignment, investment protections, dispute resolution mechanisms, and sector-specific cooperation frameworks that strengthen the overall effectiveness of CETA. Special emphasis is placed on high-growth sectors such as information technology, pharmaceuticals, textiles, and financial services, alongside the potential benefits for small and medium-sized enterprises (SMEs) and labor markets. Additionally, the study highlights key challenges, including non-tariff barriers, intellectual property rights enforcement, and standards harmonization, which may influence the agreement’s full realization. By integrating theoretical perspectives with institutional analysis, the study concludes that CETA has the potential to boost India’s export competitiveness, attract foreign direct investment, and accelerate long-term economic development, provided that complementary domestic reforms and effective implementation measures accompany the agreement.