India-UK trade deal begins on July 15: What's getting cheaper?
What's the story
India and the United Kingdom have signed a Comprehensive Economic and Trade Agreement (CETA), which will come into effect from July 15. The deal is one of India's most significant trade liberalization efforts with a developed economy. Under the agreement, India will cut import duties on several products over a period of time while protecting sensitive sectors such as gold, telecom equipment, and aluminum scrap.
Trade benefits
Immediate duty-free access for 64% of tariff lines
The CETA will immediately make 64% of India's tariff lines duty-free. However, these products only account for about 18% of the UK's current exports to India. The real commercial potential lies in another 24% of tariff lines, which cover nearly two-thirds of the UK's current exports to India. These import duties will be phased out over a period of up to 10 years.
Key beneficiaries
Silver and premium automobiles will benefit the most
Among the products that will benefit from the CETA, silver emerges as the biggest winner. India imported nearly $4.93 billion worth of 99.9% purity silver bars from the UK in FY2025-26. The import duty on these silver bars will be phased out over a decade, although imports will still require government licenses. Premium automobiles also get unprecedented market access under this deal with duties on fully built premium passenger vehicles being significantly lowered for UK exports.
Additional benefits
Tariff relief for premium alcoholic beverages
The CETA also provides major tariff relief for premium alcoholic beverages, including Scotch whisky. India's import duty on Scotch whisky will be slashed from 150% to 75% immediately and further to 40% over a period of 10 years. Other premium spirits such as brandy, bourbon, rum, gin, vodka, tequila, cider, sake, and liqueurs are also included in this deal but with minimum import price conditions. The aerospace industry stands to gain significantly under this agreement. over seven years.
Tariff relief
Industrial raw materials also get tariff cuts
The CETA also offers tariff relief for several industrial raw materials. Iron and steel scrap will become duty-free immediately, while duties on copper scrap, brass scrap, lead scrap, stainless steel scrap, and waste paper will be phased out over time. However, India has retained protection for several sensitive product categories such as gold bars, aluminum scrap, telecom data communication equipment, and calcined petroleum coke despite the UK's export interest in these sectors.