UK firms can offer telecom, construction services in India without local setup under FTA
The Comprehensive Economic and Trade Agreement (CETA) will allow UK companies to offer services like telecom and construction in India without needing a local presence. British firms will receive the same treatment as Indian companies.
ADVERTISEMENT
In a landmark move to boost bilateral trade and services, India and the United Kingdom signed the Comprehensive Economic and Trade Agreement (CETA) on July 24 in London. The deal allows British companies to offer services in India, including telecom, construction, and related sectors, without the need to establish a local presence, a significant shift in cross-border service delivery rules.
According to Commerce Ministry, UK firms will receive “national treatment”, meaning they will be treated on par with their Indian counterparts in these sectors. The agreement also opens the door for greater cooperation in professional services, finance, and technology.
The agreement is expected to take up to a year for full implementation as it still requires ratification by the British Parliament.
Services play a pivotal role in the trade relationship between the two countries. India has a trade surplus of around USD 6.6 billion with the UK. In FY24, India’s services exports stood at USD 19.8 billion, while imports were at USD 13.2 billion.
Under CETA, the UK has opened up 137 services sub-sectors to Indian firms, providing access in areas such as IT, legal, and financial services. In return, India has committed to opening 108 sub-sectors to British companies. These include: Accounting and auditing; Financial services, with FDI capped at 74%; Telecom services, with 100% FDI permitted; Environmental services; and auxiliary air transport services.
Negotiations for the India-UK FTA had been ongoing for over two years, aimed at enhancing economic ties, removing trade barriers, and encouraging investment flows. The deal is seen as a strategic post-Brexit move by the UK to strengthen relations with emerging economies, while for India, it diversifies trade partnerships amid a global push for resilient supply chains.
