The India-UK CETA showcases the immense potential of the tooling industry to unlock new avenues for growth and global competitiveness. In a landscape dominated by the US, the EU, and China, India’s value-driven manufacturing capabilities offer a clear competitive advantage. By easing tariffs and clarifying rules of origin, the agreement sets the stage for deeper trade integration and long-term industry growth.
-By Sanjay Chavre, Advisor, TAGMA India
On July 24, 2025, India and the United Kingdom signed the Comprehensive Economic and Trade Agreement (CETA). This landmark trade agreement is set to open up significant opportunities for bilateral trade in various sectors, including tooling. This article explores the key highlights of the India-UK CETA, tariff commitments from both countries, rules of origin for tooling, and growth potential in tooling exports and imports between India and the UK.
Highlights of India-UK CETA
- The agreement was signed on July 24, 2025, but requires approval from the UK Parliament before implementation.
- The Indian government will issue a notification to make the agreement effective.
- The UK has opened its manufacturing sector to Indian products with zero duties applied immediately on most items.
- India has allowed zero duty imports on most tooling from the UK immediately, with some duties phased out gradually over periods of 5 to 10 years.
Understanding the ITC-HS Code
An ITC-HS code is the Indian Trade Clarification code, an eight-digit classification used for all import-export activities in India. It is an extension of the internationally standardised six-digit Harmonized System (HS) code, which classifies traded products. The additional two digits in the ITC-HS code are specific to Indian customs for trade and statistical purposes. This coding system plays a crucial role in identifying and categorising goods, including tooling products, for tariff assessments and customs procedures.
India’s Tariff Commitments on Tooling under CETA
The following extract for Tooling from Annex 2A-a: (Schedule of Tariff Commitments of India)schedules:
Table 1
| ITC (HS) Code | Tooling | BCD | Base Rate | Tariff Policy |
| 82072000 | Dies For Drawing Or Extruding Metal | 10% | 11% | E10 |
| 82073000 | Tools For Pressing, Stamping Or Punching | 10% | 11% | EIF |
| 82089040 | Cutting And Clicking Dies | 10% | 11% | E5 |
| 84661010 | Tool Holders | 7.5% | 8.25% | EIF |
| 84661020 | Self-Opening Dieheads | 7.5% | 8.25% | EIF |
| 84662000 | Work Holders | 7.5% | 8.25% | EIF |
| 84663010 | Chucks | 7.5% | 8.25% | EIF |
| 84663020 | Jigs & Fixtures | 7.5% | 8.25% | EIF |
| 84663090 | Other <Br> Other | 7.5% | 8.25% | EIF |
| 84669100 | For Machines Of Heading 8464 | 7.5% | 8.25% | EIF |
| 84669200 | For Machines Of Heading 8465 | 7.5% | 8.25% | EIF |
| 84669310 | Parts And Accessories Of Machine Tools, For Working Metals | 7.5% | 8.25% | E5 |
| 84669390 | Other | 7.5% | 8.25% | E5 |
| 84669400 | For Machines Of Heading 8462 To 8463 | 7.5% | 8.25% | E5 |
| 84801000 | Moulding Boxes For Metal Foundry | 7.5% | 8.25% | EIF |
| 84802000 | Mould Bases | 7.5% | 8.25% | EIF |
| 84803000 | Moulding Patterns <Br> Moulds For Metal Or Metal Carbides: | 7.5% | 8.25% | EIF |
| 84804100 | Injection Or Compression Types | 7.5% | 8.25% | EIF |
| 84804900 | Other | 7.5% | 8.25% | EIF |
| 84805000 | Moulds For Glass | 7.5% | 8.25% | EIF |
| 84806000 | Moulds For Mineral Materials <Br> Moulds For Rubber Or Plastics : | 7.5% | 8.25% | EIF |
| 84807100 | Injection Or Compression Types | 7.5% | 8.25% | EIF |
| 84807900 | Other | 7.5% | 8.25% | EIF |
Table 1 Explanation
- The Base Customs Duty (BCD) rates vary between 7.5% to 10%.
- Tariff policies are coded as EIF (Entry Into Force), E5, and E10, indicating zero-duty implementation timelines (immediate, 5 years, and 10 years respectively).
- EIF (Entry Into Force): of the zero duty from the date India notifies the Schedule.
- E5 / E10: number of years from India’s notification ,when the duty becomes zero in equal installments.
Forging Stronger Economic Ties through CETA
The India-UK Comprehensive Economic and Trade Agreement (CETA) ushers in a promising era for bilateral trade, notably boosting the tooling sector with immediate zero-duty access from the UK and phased tariff reductions by India. This landmark pact not only facilitates seamless market entry and tariff relief but also encourages compliance, innovation, and value addition through clear rules of origin. With India’s manufacturing strengths and cost competitiveness, the agreement lays a solid foundation for expanded exports, mutual growth, and deeper economic partnership, positioning both nations to capitalize on emerging global trade opportunities.
UK’s Tariff Commitments on Tooling under CETA
The following extract Tooling from Annex 2A-b (Schedule of Tariff Commitments of the United Kingdom)
Table 2
| ITC (HS) Code | Tooling | Staging category |
| 82 | Tools, implements, cutlery, spoons and forks, of base metal; parts thereof of base metal | A: |
| 84 | Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof | A: |
Understanding the UK Tariff Framework
The United Kingdom’s tariff commitments for tooling products as part of the India-UK CETA, specifically covering broad categories under ITC (HS) codes 82 and 84. These correspond to tools, implements, cutlery, and machinery including nuclear reactors, boilers, and mechanical appliances with their parts. The staging category “A” indicates that these products will enjoy immediate zero import duties upon the agreement’s implementation, ensuring that Indian exporters gain instant duty-free access to the UK market for these tooling segments. This commitment reflects the UK’s openness to facilitating bilateral trade by removing tariffs on a wide range of industrial and tooling-related products, thus creating favorable conditions for growth and competitive advantage for Indian tooling exports.
Outlook for Bilateral Trade Growth
The UK’s immediate tariff elimination on key tooling product categories underlines a significant opportunity for Indian manufacturers to expand their exports in a highly competitive market, strengthening the bilateral trade relationship. This commitment facilitates streamlined market entry and cost advantages, encouraging Indian businesses to leverage their manufacturing strengths and scale exports. The zero-duty access acts as a catalyst for growth and deeper economic cooperation, positioning the tooling sector to contribute substantially to the overall trade enhancement envisaged under the India-UK CETA.
Rules of Origin
Rules of Origin in the India-UK CETA determine whether a product qualifies as originating from India or the UK to benefit from reduced customs duties. A product qualifies if it undergoes substantial transformation in the exporting country, proven either by a change in tariff classification at the 6-digit HS code level (CTSH) or by having at least 40% of its value added in India or the UK (Standard QVC). Exporters can use either method to meet these criteria, ensuring flexibility. This prevents goods that merely involve minor processing or excessive imported content from unfairly claiming tariff benefits, thereby encouraging genuine local manufacturing and value addition within the trade zone.
Tooling Categories under Rules of Origin
- Chapter 82: Tools, implements, cutlery, spoons, and forks, of base metal; parts thereof of base metal — subject to CTSH and Standard QVC.
- Ex Chapter 84: Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof — subject to CTSH and Standard QVC.
Explanation
- Rules of Origin: A product will be considered originating from India or the UK when it satisfies a condition relating to the maximum allowed imported content. Only then is the benefit of reduced customs duty applicable.
- CTSH (Change in Tariff Shift): Under CTSH, a product is considered “originating” if, during production, it undergoes a change at the six-digit level of the Harmonized System (HS) code. This ensures that sufficient transformation has occurred in the exporting country (India or the UK), rather than merely repackaging or minor processing.
- Standard QVC: The Qualifying Value Content measures the percentage of a product’s value that must originate in India or the UK. It ensures that goods claiming origin status under CETA have undergone substantial transformation or value addition in either country. For most products, the default Standard QVC requirement is 40%. This means at least 40% of the ex-works price of the final product must come from originating materials, labor, or processing in India or the UK.
- Exporters can choose between QVC or CTSH to qualify for tariff benefits — a ‘co-equal’ rule that adds flexibility.
UK’s Import of Tooling: Market Overview and Growth Potential
This segment provides detailed data on the UK’s import volumes and values for various tooling products in 2023, highlighting the dominant global suppliers and the current import statistics involving India. These figures showcase significant market opportunities for Indian exporters to increase their share in the UK’s tooling demand. The extensive listing by ITC (HS) codes includes categories such as dies for drawing metal, tools for pressing, tool holders, work holders, dividing heads, machine parts, and moulds. The data underscores the UK’s reliance on multiple international suppliers, with the US, EU, China, and others leading imports, while also pointing toward substantial growth possibilities for Indian tooling manufacturers seeking to enhance bilateral trade under the India-UK CETA framework. This analysis ties into the article’s broader theme of exploring tariff commitments, trade facilitation, and export growth opportunities in the tooling sector enabled by the new trade agreement.
I. 820720 — Dies for Drawing or Extruding Metal
- In 2023, the top importers of dies for drawing or extruding metal are Thailand ($109,081.40K, 3,996,300 Kg), United States ($94,323.10K, 2,420,500 Kg), European Union ($58,247.18K, 692,362 Kg), Germany ($45,363.41K, 914,335 Kg), and Spain ($40,592.77K, 1,767,920 Kg).
- UK imports in 2023 amounted to US $11,516,570, out of which imports from India were US $500,940. There are huge growth possibilities
II. 820730 — Tools for Pressing, Stamping or Punching
- In 2023, top importers include Mexico ($1,051,646.73K), United States ($1,007,749.86K, 64,545,100 Kg), European Union ($888,848.15K, 62,884,200 Kg), Germany ($481,990.21K, 24,204,200 Kg), and China ($365,246.71K, 17,338,400 Kg).
- UK imports in 2023 were US $105,671,670, of which those from India were US $206,550, indicating huge growth potential.
III. 846610 — Tool Holders and Self-Opening Dieheads for Use
- Top importers in 2023 were United States ($1,022,896.29K, 7,900,230 Kg), European Union ($448,119.36K, 7,191,380 Kg), Germany ($341,363.28K, 5,865,730 Kg), China ($211,957.04K, 2,298,300 Kg), and Italy ($195,728.63K, 8,138,380 Kg).
- United Kingdom imports of Tool holders and self-opening dieheads for use was $72,521.76K.
- United Kingdom imported Tool holders and self-opening dieheads for use from Germany ($24,074.01K ,745,796 Kg), United States ($11,768.74K , 50,128 Kg), Japan ($5,583.71K , 65,960 Kg), Italy ($4,910.96K , 60,508 Kg), China ($4,442.96K ).
- Imports from India stood at US $2,713.76K with huge growth possibilities.
IV. 846620 — Work Holders for Use with Machinery of Heading 84.56 onwards
- Top importers in 2023 were United States ($311,485.65K, 3,640,000 Kg), European Union ($209,325.43K, 6,051,200 Kg), Germany ($197,717.49K, 7,030,390 Kg), China ($194,532.50K, 3,601,800 Kg), and Mexico ($76,905.57K, 1,069,880 Kg).
- United Kingdom imports of Work holders for use with machinery of heading 84.56 to was $73,677.14K and quantity 1,457,910Kg.
- Imports originated from Germany ($23,087.32K, 520,245 Kg), UK ($18,758.39K, 104,691 Kg), United States ($11,769.53K, 125,116 Kg), Japan ($3,852.22K, 96,796 Kg), and China ($3,666.29K, 231,435 Kg).
- Imports from India were US $908.39K representing huge opportunities.
V. 846630 — Dividing Heads and Other Special Attachments for Machines
- Top importers in 2023 were India ($155,392.65K, 1,706,340 Kg), China ($115,741.01K, 2,985,480 Kg), United States ($94,047.74K, 1,032,720 Kg), European Union ($66,429.17K, 1,775,100 Kg), and Italy ($40,090.06K, 732,482 Kg).
- – UK imports totalled $18,214.35K with quantity of 470,041 Kg.
- UK imported mainly from Japan ($8,612.90K, 206,401 Kg), Germany ($2,055.62K, 19,499 Kg), United States ($1,542.79K, 22,408 Kg), Poland ($958.56K, 25,080 Kg), and Switzerland ($865.98K, 7,700 Kg).
- Imports from India were US $229.36K.
VI. 846691 — Parts and Accessories Not Elsewhere Specified for Use on Machines
- Top importers in 2023 included United States ($78,842.45K), European Union ($67,978.07K, 5,415,930 Kg), Germany ($58,368.51K, 3,084,280 Kg), Italy ($32,766.57K, 5,038,030 Kg), and France ($32,402.60K, 28,687,000 Kg).
- UK imports were $14,091.86K with quantity 253,258 Kg.
- Imports to the UK came from Italy ($3,680.10K, 52,216 Kg), United States ($2,311.39K, 24,820 Kg), Germany ($1,534.11K, 15,999 Kg), UK ($974.14K, 6,821 Kg), and Austria ($861.43K, 15,697 Kg).
- UK imports from India were US $47.50K with huge opportunities.
VII. 848071 — Moulds, Injection or Compression Types, for Rubber
- Top importers in 2023 were European Union ($1,866,596.29K, 72,692,500 Kg), United States ($1,860,832.26K, 43,610,200 Kg), Mexico ($1,561,337.79K, 51,445,700 Kg), Germany ($783,989.91K, 27,860,100 Kg), and Japan ($526,070.78K, 33,321,800 Kg).
- UK imports were $190,150.38K with quantity 7,187,320 Kg.
- UK imported from China ($51,689.23K, 3,272,080 Kg), Portugal ($37,023.87K, 1,074,490 Kg), Germany ($29,000.79K, 603,196 Kg), United States ($8,989.27K, 134,815 Kg), and France ($8,637.18K, 186,545 Kg).
- Imports from India stood at US $1,793.70K with huge opportunities.
Strategic Growth and Global Opportunities for India’s Tooling Industry
The India-UK Comprehensive Economic and Trade Agreement (CETA) presents significant growth opportunities for the Indian tooling industry, enhancing export potential to the UK and global markets. With major tooling trade dominated by the USA, EU, and China, India’s competitive low-cost manufacturing base positions it uniquely to expand its market share worldwide. The agreement’s tariff reductions, clear rules of origin, and trade facilitation measures create a conducive environment for India to strengthen bilateral trade, boost manufacturing, and capitalize on emerging global demand in the tooling sector.
Source:
Table 1- Ministry of Commerce website: Page on India -UK CETA India’s Tariff Commitments : https://www.commerce.gov.in/wp-content/uploads/2025/07/02A-a-India-Schedule-of-Commitment-for-Goods.pdf
Table 2- https://www.commerce.gov.in/wp-content/uploads/2025/07/02A-b-UK-Schedule-of-Commitment-for-Goods.pdf
World integrated Trade Solutions : https://wits.worldbank.org/trade/comtrade/en/country/ALL/year/2023/tradeflow/Exports/partner/WLD/product/848071
About the Author
Sanjay Chavre is Advisor to TAGMA India.
A respected technocrat and policy strategist, Mr. Chavre has been a pivotal figure in the evolution of India’s manufacturing and tooling ecosystem. With decades of experience at the intersection of government and industry, he has contributed to the development of forward-looking policies that promote indigenous technology, strengthen domestic capabilities, and uplift MSMEs within the tooling and precision engineering sectors.
Mr. Chavre has held key roles in various government departments. He has been instrumental in formulating and executing initiatives that align with India’s long-term vision for industrial growth and self-reliance. His expertise lies in enabling public-private collaboration, fostering innovation ecosystems, and building frameworks that support sustainable industrial development.
In his current role as Advisor to TAGMA India, he continues to guide efforts aimed at enhancing the global competitiveness of Indian toolmakers. His insights have been vital in positioning the Indian tooling industry as a reliable and technologically advanced partner in the global supply chain.
This article was published in TAGMA Times
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