Bridging trade and gender: How the India-UK FTA advances gender equality

The India-UK Comprehensive Economic and Trade Agreement (CETA) is one of the most detailed and extensive FTAs (free-trade agreements) India has signed to date, covering many “WTO plus issues” for the first time. Among the most notable aspects is the integration of gender considerations across multiple chapters, along with a standalone chapter on gender equality—a landmark development for India’s trade policy. Given that many Indian firms have trade ties with the UK, the reduction in tariff rates is expected to boost these exports while also reinforcing the adoption of the gender-inclusive practices outlined in the agreement.

During one of our recent field visits to Shahi Exports, one of India’s largest garment exporters, we found that a significant share of the workforce is women. In fact, about 70% of the female workforce has benefitted from the initiatives of multinational sourcing firms—many of Shahi’s female recruitment, promotion, wage-equalisation, and upskilling policies are initiated by the international brands that they supply to. The gender-related provisions laid out in the India-UK FTA will accelerate such initiatives further.

Moving gender from margins to the core
Crucially, the India-UK FTA moves beyond token acknowledgements of women’s contributions to the economy. Until now, gender considerations have been conspicuously absent from India’s external economic policymaking. Notably, India opted out of signing the Joint Declaration on Trade and Women’s Economic Empowerment at the WTO, and gender was not mainstreamed into India’s foreign policy or its existing FTAs.

With the India-UK FTA, this is set to change. By embedding gender equality into its core, the agreement could transform the narrative of women being passive beneficiaries of trade into active participants and leaders within global value chains. Trade is a proven engine of growth, but its benefits are not gender neutral—without careful, intentional policy design and complementary domestic reforms, trade liberalisation often perpetuates existing inequalities.

As India’s first agreement with a dedicated and comprehensive chapter on Trade and Gender Equality, the India-UK CETA underscores the need for such systemic action by acknowledging both the contributions of women and the barriers they face in achieving equal participation in the workforce. The labour chapter also contains detailed provisions that promote non-discrimination and gender equality in the workplace.

Gender and equality considerations are also embedded across other chapters, such as those on trade and development cooperation, government procurement, and digital trade, to support women’s inclusion in these domains. The agreement further encourages national standard-setting bodies to adopt gender-responsive standards and processes. Within the digital trade chapter, the parties commit to exchanging experiences and best practices for creating datasets and conducting gender-specific analysis related to digital policies.

Establishing institutional structures for better implementation
Normally, such cooperative measures are undertaken on a best-endeavour basis, without there being a specific mechanism to track progress. This is simply because, for certain issues, it is difficult to establish exogenous governance mechanisms or complex law elements, since they are often deeply tied to cultural and social identities and values that go beyond general rulemaking. Therefore, more agreements in the past have stopped at a mere acknowledgement of fact and specifying the intent to address it.

The India-UK agreement adopts a distinct and stronger approach by creating a treaty body specifically dedicated to advancing trade and gender equality. Notably, this body is set up at the time of the agreement’s signing, rather than being postponed for future establishment. Treaty bodies function as endogenous governance mechanisms, formed with representatives from both parties to the agreement. This contrasts with exogenous mechanisms, which involve a third party. Nonetheless, treaty bodies offer a more effective structure than agreements that merely state intentions without designating any entity to monitor implementation.

In this regard, a Working Group on Trade and Gender Equality is established, with government representatives from both parties to consider matters as appropriate to advance women’s economic empowerment and gender equality across this Agreement. Moreover, it will also support the effective implementation and operation of this Chapter and will report to a higher joint committee, which is also established by the trade agreement.

Collective benefits can be much greater for improving women participation in the workforce
If implemented effectively, these provisions could bring significant benefits. One of the most tangible ways the India-UK FTA could empower women is through significant tariff reductions and duty-free access in sectors such as textiles, apparel, leather, and footwear. These sectors, which employ a large share of women in manufacturing, are classified as ‘Category A’ in the UK’s schedule of commitments, meaning the UK has committed to eliminating all customs duties on these items from the date the agreement takes effect.

Consequently, UK imports from India in these sectors are projected to rise by 85% compared to a no-FTA scenario. These gains could especially represent thousands of new jobs and more secure livelihoods for Indian women—research by the EXIM Bank shows that in India, a 1% tariff reduction in female-intensive export sectors can increase the female labour supply by 0.36% and thereby add 0.13% to GDP.

Importantly, with gender and equality provisions embedded in the agreement, companies seeking to benefit from these concessions will also be expected to follow fair and inclusive hiring practices. Such FTA-aligned sourcing requirements by UK-based companies could catalyse India’s export-oriented firms to introduce initiatives to reduce wage discrimination, undertake skill building, incentivise female leadership, and ensure workplace safety. This doesn’t mean that this is the only way to achieve gender balance or that no other efforts are being made. However, certain gender-based disparities are so deeply rooted in our systems that they demand an extra push to effectively address and overcome them.

Paving an inclusive and equitable way forward
This should only be seen as a beginning. While it marks a promising step forward, the true impact of such mechanisms will rely on how well they are implemented, the consistency of stakeholder engagement, and the adoption of a comprehensive, goal-oriented approach. India must also augment the FTA with domestic programmes, such as trade facilitation for women-led SMEs, export-readiness training, market intelligence, and subsidised logistics.

To be a genuine game changer, the FTA’s commitments should be woven into the broader tapestry of India’s policy landscape. This could mean including gender issues in India’s overall foreign trade policy, establishing a dedicated women entrepreneurship cell within the Ministry of Commerce, and cross-linking trade reforms with national goals of gender equality and inclusion.

The India-UK FTA sets a new standard for India’s FTAs and could serve as the model/base text for all future agreements. If India embraces this as a blueprint, it won’t just be catching up to global best practice, but it will be setting a new standard for trade-led gender equity.

The writers are Tanu M. Goyal, Senior Fellow and Shravani Prakash, Consultant with ICRIER.