India-UK trade deal brings major tariff cuts across key sectors
What's the story
India has signed a trade agreement with the UK, offering phased tariff reductions on a wide range of British goods. The free trade pact promises duty-free access to items from chocolates to pet food, cosmetics to consumer appliances, while keeping sensitive sectors out of the equation. This is one of India's major trade liberalization moves in recent years.
Trade impact
90% UK goods to see reduced or eliminated import tariffs
The Global Trade Research Initiative (GTRI) estimates that nearly 90% of goods coming from the UK will see reduced or eliminated import tariffs under this agreement. "The agreement includes phased concessions across a broad range of sectors - from chocolates and consumer appliances to industrial inputs - while strategically excluding sensitive items like tea, coffee, and gold," GTRI founder Ajay Srivastava told PTI.
Sectoral concessions
Pet food, snacks, and protein concentrate products tariff details
Under the trade agreement, tariffs on chocolates (33% duty) will be eliminated over seven years through equal annual cuts. Snack items like pastries and cakes (33% duty) and protein concentrates (44% duty) will be duty-free in 10 years. Pet food products, dog and cat food, currently taxed at 22%, will also see full tariff elimination in seven years. However, high-duty items like sausages (110%) are excluded from this agreement to protect domestic producers.
Consumer goods
What to expect in personal care, hygiene sectors?
In the personal care and hygiene sector, India will remove its 22% duty on cosmetics and 11% duty on soaps in 10 years. Tariffs on shaving creams, gels, and detergents (all currently taxed at 11%) will be removed immediately after implementation. The home appliance sector will also witness major liberalization with duties of 22% on air conditioners and washing machines being phased out over a decade.
Trade benefits
India's approach toward industrial inputs and recyclable materials
India has taken a calibrated approach to industrial inputs and recyclable materials under the trade agreement. Waste paper (11% duty) and silver bars (10.75%) will be duty-free in 10 years. Ferrous scrap, which attracts a minimal 2.75% duty, will be exempted immediately, while brass scrap will follow a 10-year timeline for tariff elimination. High-tech imports such as turbo-jets with thrust over 25 kilonewtons (currently taxed at 8.25%) will be duty-free in seven years, benefiting India's aerospace and machinery sectors.
Duty reduction
Indian government to cut import duties on UK alcoholic beverages
India has also agreed to cut its high 110% import duty on select UK alcoholic beverages such as whisky, gin, and vodka, only for bottles priced above $6 per 750ml. For these imports, duties will be reduced to 75% in the first year and further down to 40% by the 10th year. This gradual reduction aims at easing market access while safeguarding domestic liquor manufacturers from cheaper imports.
Strategic exclusions
Sensitive sectors kept out of the agreement
Despite wide-ranging concessions, India has kept high-sensitivity sectors out of any tariff relief under the trade agreement. Products such as tea, coffee, sausages, and gold bars, facing import duties as high as 110%, are excluded from this agreement. "This reflects India's careful balance between liberalizing trade and safeguarding its farmers and small-scale industries," Srivastava told PTI.