The key India-UK Free Trade Agreement comes into effect from July 15 onwards, meaning different things for different sectors in both countries.
The India-UK Comprehensive Economic and Trade Agreement (CETA) allows duty-free entry for nearly 99% of Indian exports to the British market while easing tariffs on several UK goods entering India.
UK's end of the bargain ensures gains for labour-intesive Indian sectors, such as textiles and apparels after abrogation of export levies from an earlier 12%.
On the other end, India has also made some major cuts in its tariffs for many UK sectors such as alcoholic beverages, auto and ancillary, along with commodities like silver. Here's an overview of how things will change for consumers once the agreement is enforced:
Which Indian Sectors Will Reap Benefits Of FTA?
Labour Intensive sectors in India namely garments, textiles, footwear, carpets, processed foods, cereals, fruits, vegetables, spices, fish and meat products will now enter the UK duty-free, replacing tariffs that previously ranged between 4% and 16%.
Besides this, greater market access for sectors including automobiles and auto components, machinery, electronics, fabricated metal products, ceramics, glass, stone and cement products will aid their international exposure and sales.
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The UK has agreed to provide preferential access to Indian-made electric, hybrid and hydrogen passenger vehicles. Eligible exports within an agreed quota will enter the UK duty-free, compared with the standard 10% tariff.
Sensitive products like fresh apples, walnuts, whey, modified whey, blue-veined cheese, selected seed varieties, gold bars and smartphones have been exempted from tariff concessions by India.
British Whiskey, Rum, Vodka To Get Cheaper
The FTA has lowered import duties on premium alcoholic beverages, including Scotch whisky, bourbon, rum, gin, vodka, brandy, tequila, sake, cider, mead and liqueurs.
"Industries across the United Kingdom will benefit, with whisky tariffs cut from 150% to 40%, automotives from 100% to 10% under a quota and cosmetics will see tariffs of up to 22% eliminated either from day one or after 10 years," a joint statement by both countries had outlined last month.
The Big Auto Duty Cut
In a landmark first, the Indian government has agreed to cut custom duties on fully UK built passenger vehicles substantially. Import tariffs on fully built passenger cars will be reduced from 110% to 10% in a phased manner over the years.
Immediate concessions will be received by petrol and diesel vehicles while electric, hybrid and hydrogen-powered passenger vehicles will become eligible only from the sixth year, giving domestic EV manufacturers a five-year protection window.
India will permit imports of 3,78,000 conventional-engine passenger vehicles from the UK at concessional duties over the first 15 years of the agreement.
For trucks, duties on completely built units will decline from 44% to 8.8% within quota limits by the fifth year. The annual quota will rise from 2,500 units in Year 1 to 3,500 units from Year 5, while duties on imports outside the quota will gradually fall to 22% by Year 10.
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Silver To Outshine Other Imports?
Britain is the India's largest supplier of refined silver with a 45.4% share of total silver-bar imports. So far, India had imposed 15% on silver, which consisted of a 10% Basic Customs Duty and a 5% Agriculture Infrastructure and Development Cess (AIDC).
But under the FTA, tariffs on 99.9% purity silver bars will be phased-out over a period of 10 years. However it is important to note that while duties are being reduced, all silver imports from the UK still require an import licence from the Directorate General of Foreign Trade.
During financial year 2026, India imported nearly US$4.93 billion worth of silver bars from the UK. The duty relaxations may make silver the biggest beneficiary of the agreement.
However it is important to note that India tightened curbs on Silver imports in a bid to narrow its trade deficit and ease pressure ​on the rupee in the last few months.
Steel Off The Tightrope?
Steel exports to the UK were under a fog of uncertainties despite the overall gains of the FTA, as Britain tightened its steels safeguard regime.
Last month, though, Indian officials said nearly 85% of India's steel exports to the UK remain outside the scope of the UK's safeguard regime.
While 188 steel tariff lines are covered by the measures, India and the UK have arrived at a mutually acceptable arrangement to ensure continued market access, including for products falling within the affected categories.
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