Opportunities and Challenges of CETA for a Green UK–India Alliance: By Archa Joe and Dr Parvathy Poornima

By Archa Joe, Lecturer in Business, The City College, London and Dr Parvathy Poornima, Assistant Professor, St Joseph’s University, Bengaluru

The article examines the strategic opportunities and challenges arising from the UK–India Comprehensive Economic and Trade Agreement (CETA), which entered into force on 15 July 2026, in the context of strengthening energy security and economic diplomacy amid ongoing global geopolitical uncertainties. It explores how CETA can support both countries in reducing their exposure to volatile fossil fuel markets, enhancing energy resilience, and fostering greater cooperation in the energy sector. The article also highlights the key challenges that the UK and India must address to fully realise the potential benefits of their CETA partnership.

The continuing geopolitical crisis in the Middle East has exposed the volatility of global energy markets. The latest escalation has reinforced the importance of strengthening energy security and reducing vulnerability to disruptions in global oil supplies. Against this backdrop, the UK–India Comprehensive Economic and Trade Agreement (CETA), which came into force on 15 July 2026, presents a timely opportunity to deepen cooperation on energy security and sustainable infrastructure. The efficacy of CETA will accelerate the green transition and both the countries can reinforce energy resilience, ease dependence on volatile fossil fuels and advance net-zero and economic commitments. CETA holds significance beyond economics now as energy insecurity has become a strategic challenge posed by geopolitical conflicts, supply disruptions and resilience concerns.

The UK and India face different challenges in their energy sectors, but they also share common goals. In recent years, India has made significant progress in diversifying its energy mix beyond its traditional dependence on coal, while the United Kingdom is undergoing a rapid transformation by investing heavily in renewable energy. As fragility of global energy markets has been exposed, both countries have an opportunity to strengthen collaboration in clean energy. India is the world’s third-largest energy consumer, yet it produces only around 11% of the oil it consumes, according to Stanford University’s Understand Energy initiative. Coal dominates India’s energy sector while many advanced economies are rapidly expanding their renewable energy capacity. The UK faces a different set of dilemmas with regard to its energy market. The wars in Europe and the Middle East have pushed fuel prices up and have pressured households. Energy bills continue to be named by the general public as the major cause of increasing cost of living and the National Energy Action estimates that 6.7 million UK households are in fuel poverty. Considering this, the UK government since 2021 has been investing more in renewables within the energy mix thereby reducing over reliance on volatile international markets.

Both countries could turn these times of instability into an opportunity. As India gradually transitions towards renewable energy, the UK could support this shift through investment in solar, wind power, green hydrogen, and other sustainable infrastructure. Despite ongoing environmental challenges, India has made significant progress in expanding access to cleaner fuels. In 1990, only 11% of India’s population primarily used clean cooking fuels. By 2022, that share had increased to 74.5%, mainly through increased LPG adaptation.

A strategic cooperation with India will offer the UK an opportunity to venture its post-Brexit global role by demonstrating stability on economic diplomacy notwithstanding domestic political instability. CETA can strengthen India’s position as an emerging power by drawing green investment while reducing dependence on any dominant global actor, strengthening its strategic autonomy. The vibrant Indian diaspora in the UK can catalyze the partnership through investment and innovation which could advance India-UK ties in an era of geopolitical uncertainties. A shared partnership built on sustainability and resilience can create opportunities and this collaboration will pave a path towards both countries meeting their ambitious net zero goals. Such an alliance can have spillovers in trade and lead to greater investment in goods and services. While India continues to heavily depend on coal, the United Kingdom has largely phased out coal-fired power generation. The UK’s stronghold in green energy can meet India’s large-scale energy demands and support its infrastructure needs.

CETA cannot guarantee absolute success of green investment due to differences in the policies of India and the UK in the domains of climate, regulations and domestic politics. Both countries shall ensure that the partnership delivers more than trade liberalization by supporting vulnerable communities affected by the transition. The UK has to balance the CETA with India while preserving its strategic ties with EU and USA, in line with its foreign policy ambitions, whose outlook on trade and climate may differ. For India a careful approach is required in attracting investment while continuing to expand and diversify its energy partnerships to maintain its strategic autonomy. Simultaneously, political instability in the UK and India’s balancing of economic diplomacy with climate goals will determine the progress on green investment and CETA ties. As India’s ambitions as an emerging power prioritize partnerships that deliver strategic and technological advantages, this put pressure on the UK to offer more than trade access through cooperation in climate technology, defence etc. In addition, CETA has to expand beyond measurable trade volumes and investment flows to benefit the equitable distribution of the green transition among the labour class, local communities and marginalized groups in both countries. Hence commitment towards social justice equips CETA to address socio economic inequalities to enhance sustainable development through a resilient partnership.

To translate the CETA project into measurable outcomes, both countries should advance in the direction of sustained investment in renewable energy, green hydrogen, and resilient infrastructure, which requires long term policy goals, regulations and stronger public-private partnerships. In line with the UK–India 2030 Roadmap commitments, CETA can deliver energy security and economic cooperation in addition to climate resilience.