From Luxury Cars to Scotch: What all is getting cheaper after India-UK FTA
Signed on July 24, the Comprehensive Economic and Trade Agreement (CETA) will slash tariffs on UK imports and open zero-duty access for Indian textiles, jewellery, and food exports.
ADVERTISEMENT
In a landmark step towards strengthening bilateral trade, India and the United Kingdom signed a comprehensive Free Trade Agreement (FTA) on July 24, in London.
This long-awaited deal promises to bring a wide range of benefits to both consumers and exporters by substantially lowering import tariffs and boosting market access.
What Gets Cheaper for Indian Consumers?
One of the key takeaways of the FTA is the drastic reduction in tariffs on British goods entering India, with average import duties dropping from 15% to just 3%. This opens the doors for premium British products to become far more affordable across several categories:
Scotch Whisky:
The duty on Scotch, a longstanding sticking point, has been slashed from 150% to 75%, making it significantly more accessible for Indian consumers.
Luxury Cars:
British-made automobiles, which were previously taxed over 100%, will now attract only a 10% duty under a quota system, slashing prices on high-end models from brands like Jaguar, Mini, and Land Rover.
F&B Products:
Soft drinks, chocolates, biscuits, and other British food and beverage items will now be cheaper, potentially increasing their market share in India.
Cosmetics & Personal Care Products:
UK-manufactured beauty and skincare brands will become more competitively priced due to reduced tariffs.
Medical Devices:
Tariff cuts will bring down the cost of UK-made healthcare equipment and devices, improving affordability and access.
Sectors That Will Gain in the UK Market
On the flip side, the FTA provides Indian exporters with enhanced access to the UK market, especially in labor-intensive and high-growth sectors. Import duties on a range of Indian goods will be slashed or eliminated, offering a competitive edge for:
Textiles & Apparel:
Indian garments and home textiles will now enjoy zero-tariff access, significantly boosting exports.
Leather Products & Footwear:
Duty-free status will make Indian leather goods more price-attractive in the UK.
Jewellery:
Import taxes on gold and diamond jewellery will be removed, benefiting India’s thriving gems and jewellery sector.
Agricultural & Processed Foods:
Products like Basmati rice, spices, shrimp, tea, and packaged foods will now face reduced tariffs, supporting rural incomes and agro-exports.
Industrial Goods:
Sectors such as auto components, sports goods, chemicals, and machinery will benefit from easier access and lower costs in the UK market.
Welcoming this FTA, Sudarshan Venu, Managing Director, TVS Motor Company said “The signing of the India-UK Free Trade Agreement is a pivotal moment— it opens new frontiers for Indian companies to take ‘Make in India’ to the world. We are particularly excited given the launch of new Norton vehicles this year, which will benefit from the strengthening of trade links between India and the UK. It energises our global ambitions and strengthens our resolve to build world-class products and brands.”
TVS Motor believes the India-UK FTA will create immense opportunities for Indian companies to expand their global footprint while showcasing the country's innovation and engineering excellence on a larger platform.
Dr. Anish Shah, Group CEO and MD, Mahindra Group, said, “The landmark trade agreement between India and the UK marks a transformative moment in the global economic landscape. It’s not just a win for trade, but a blueprint for a modern, values-led partnership that puts innovation, sustainability, and inclusive growth at the heart of global collaboration.
The company believes that such a cross-border partnerships will unlock economic potential, create high-quality jobs, and accelerate progress in future-facing sectors from green mobility and clean energy to digital technologies and advanced manufacturing.
The deal also allows British companies to offer services in India, including telecom, construction, and related sectors, without the need to establish a local presence, a significant shift in cross-border service delivery rules.
Neeraj Kumar, Managing Director – India, Suntory Global Spirits, believes that this pivotal development will improve access, affordability, and consumer choice in India. It also marks a positive step in strengthening bilateral trade ties and fostering an environment for enhanced investment, innovation, and growth.
"This landmark pact also brings major relief to Indian professionals working in the UK, who will now be exempt from paying up to three years of social security tax—resulting in estimated annual savings of Rs 4,000 crore. The new visa framework further enables extended professional stays in the UK. This deal sets a template for future FTAs with other economies such as the US, EU, and Japan, removing longstanding trade barriers and opening up cooperation in high-tech exports, mobile manufacturing, and semiconductors,” added Ashishkumar Chauhan, MD & CEO, NSE.
While the deal does not introduce any new visa categories, it guarantees continued access to existing routes—bringing more predictability for Indian workers already in the UK or those planning to move. Overall, it includes provisions to make business mobility easier for professionals, investors, and service suppliers moving between the two countries.
Negotiations for the India-UK FTA began in early 2022, aiming to deepen trade relations in the post-Brexit era and support diversified supply chains. The agreement is expected to boost bilateral trade by billions of dollars annually.
However, the deal will only come into force after ratification by the British Parliament, which could take up to a year.
