India-UK FTA likely to come into effect this May
What's the story
The India-UK Free Trade Agreement (FTA), signed on July 24, 2025, is expected to come into effect from the second week of May. The FTA will permit 99% of Indian exports to enter the UK market at zero duty. In return, the tariffs on British goods such as cars and whisky will be reduced in India.
Dual pacts
India and UK have also signed Double Contributions Convention pact
Along with the FTA, India and the UK have also signed the Double Contributions Convention (DCC) pact. The DCC will ensure that temporary workers don't have to pay social levies in both countries. The official said both pacts are likely to be implemented simultaneously. The CETA aims to double the current $56 billion trade between India and the UK by 2030.
Market access
Tariffs on Scotch whisky to be cut
The FTA will give India greater access to export products such as textiles, footwear, gems and jewelry, sports goods, and toys. Tariffs on Scotch whisky will be cut from 150% to 75% immediately under the pact. It will further be reduced to 40% by 2035. On automobiles, India will cut import duties to 10% over five years under a gradually liberalized quota system.
Trade benefits
India's strategy to boost trade relations with other countries
In return for the reduced tariffs on British goods, Indian manufacturers will get access to the UK market for electric and hybrid vehicles within a quota framework. The FTA is part of India's strategy to boost trade relations with other countries. Union Minister for Commerce and Industry Piyush Goyal recently said that India has signed nine FTAs in the last 3.5 years, giving preferential access to 38 developed countries.