UK Seeks India Market Access via Tax Havens Under Trade Pact, Raising Transparency Concerns
The newly signed UK–India Comprehensive Economic and Trade Agreement (CETA) includes a legally recognized route for extending treaty provisions to British Crown Dependencies--including Jersey, Guernsey, and the Isle of Man--raising fresh concerns about market access through offshore financial jurisdictions.
According to an official side letter issued by the United Kingdom, the UK formally expressed its intention to extend the agreement’s service chapters to these territories, which are well-known for their favorable tax laws, financial secrecy, and regulatory leniency. The letter reads:
“The United Kingdom intends to extend the provisions of this Agreement on trade in services… to the Bailiwicks of Guernsey and Jersey and the Isle of Man.”
(UK Side Letter: Territorial Extension of Crown Dependencies, dated 24 July 2025)
The letter also notes that the UK will consult India “as early as practicable”, but it provides no mechanism for India to refuse or veto such an extension.
These territories are classified by multiple watchdogs as low-tax or no-tax jurisdictions, and often used by companies for regulatory arbitrage, tax minimization, and corporate structuring.
By securing their eligibility under the CETA, the UK is effectively opening the door for firms registered in these jurisdictions to gain direct access to the Indian services market.
While no specific market access commitments were altered in the main services chapter or schedules of commitments, the extension to Crown Dependencies provides legal eligibility for treaty benefits--a move that could sidestep India’s financial regulatory perimeter.
The move also stands in tension with India’s ongoing global efforts to clamp down on illicit financial flows and tax evasion, including its active participation in the OECD’s Base Erosion and Profit Shifting (BEPS) initiative.
At present, there is no public indication that India objected to the UK’s proposed extension, nor any reservation recorded in the final agreement. The UK’s legal note simply indicates it will keep India “informed.”
Source: UK–India CETA: UK Side Letter on Crown Dependencies (24 July 2025)
No reciprocal provisions exist for Indian offshore territories (e.g., GIFT City) under CETA