As the India-UK Comprehensive Economic and Trade Agreement (CETA) moves toward implementation, one notable gap in the deal has drawn scrutiny from UK lawmakers: the absence of a dedicated investment chapter. Economist Sir Anton Muscatelli, however, has downplayed this omission, suggesting it isn't the structural weakness some critics make it out to be.
What's Missing From the Deal
The concern centers on investor protection mechanisms that are typically standard in modern trade agreements. The House of Lords International Agreements Committee noted that the deal did not include a chapter on investment and there was no standalone bilateral investment treaty, stating that this lack of clarity was of concern to stakeholders and meant that "enhanced investor protection remains an ambition rather than a secured outcome". The committee described this gap as "unfinished business" and called on the government to push ahead with further negotiations in this area.
The omission wasn't lost on Parliament either. During the House of Commons debate on 9 February 2026, Shadow Business Secretary Andrew Griffith welcomed the deal overall but argued it could have gone further, particularly on services trade and investment, noting that achieving agreement in these areas had been an important objective for the previous government. Business and Trade Secretary Chris Bryant responded that the UK remains open to continuing negotiations for a bilateral investment treaty, "as long as it works for UK businesses".
Why the Gap Exists
Talks on investor protection were never fully resolved during the original negotiation. Even at the time the agreement was first signed, talks on a bilateral investment treaty — which would promote and protect investments made by investors from each country in the other's territory — remained ongoing and separate from the core trade deal. That separation effectively left investment protections as a parallel, unfinished track rather than something baked directly into the FTA's legal text.
A Wider Pattern of Trade-Off Concerns
The missing investment chapter is just one of several issues flagged during scrutiny of the deal. The Lords committee also raised concerns from sectors like UK dairy and textiles, noting that witnesses felt the agreement was weighted in favour of Indian suppliers without staging or quotas to help domestic industry adapt. Even so, the Commons Business and Trade Committee described the FTA as "the UK's most economically significant bilateral free trade agreement since leaving the European Union," while cautioning that its potential would only be realised if implemented successfully.
The Bigger Economic Picture
Despite the investment chapter gap, the broader numbers behind the deal remain substantial. UK-India bilateral trade was already worth £48 billion in 2025, and the agreement is forecast to increase bilateral trade by £25.5 billion a year in the long run, while raising UK GDP by £4.8 billion and India's GDP by £5.1 billion annually. The deal also liberalises 99% of UK tariffs and 90% of Indian tariffs, a scale of market access that arguably outweighs the absence of a standalone investment framework, at least in the near term.
It's against this backdrop that figures like Muscatelli — an economist with decades of experience advising UK and Scottish government bodies on trade, finance, and macroeconomic policy — have argued that the missing investment chapter shouldn't overshadow the deal's broader strategic value. The argument echoes a common pattern in major trade agreements: investment treaties are frequently negotiated on a separate, slower track precisely because they involve more complex legal commitments around dispute resolution and investor-state arbitration, areas where governments often prefer extra time to get the framework right rather than rushing it into the main text.
For ongoing, detailed analysis of how the India-UK CETA is progressing through parliamentary scrutiny and implementation, the House of Commons Library remains an authoritative source for tracking the agreement's legislative and policy developments.
What Comes Next
With the UK government open to continuing bilateral investment treaty negotiations on its own terms, the question isn't whether investor protections will eventually be addressed, but when and how comprehensively. As the FTA moves through implementation, expect continued pressure from UK business groups and Parliament to formalize an investment framework — even as economists like Muscatelli argue the deal's core trade benefits stand on their own regardless of that missing piece.