India- UK FTA: Booze, Beauty, Bentleys & Biscuits; Full List of What’s Getting Cheaper in Both Countries

India and the United Kingdom officially implemented their long-awaited Free Trade Agreement (FTA) on Thursday, July 24, with hopes to double bilateral trade to over $112 billion by 2030, which currently stands at nearly USD 56 billion. The India-UK trade deal was signed by Union Commerce Minister Piyush Goyal and UK Business Secretary Jonathan Reynolds in the presence of the prime ministers of both countries. The good news is that the trade deal will slash tariffs on major goods and services. And Indian consumers will see reduced prices on various products. The India UK FTA is expected to boost economic growth and widen product access in both countries.

What Gets Cheaper for Indian Consumers?

1. Alcoholic Beverages

One of the headline benefits for Indian consumers is the major reduction in tariffs on premium UK alcoholic drinks. Scotch whisky and gin, two popular British exports, will see import duties slashed from 150% to 75% immediately and further reduced to 40% over a 10-year period, subject to a minimum import price. Other UK-origin drinks like brandy, rum, vodka, liqueurs, mead, cider, and tequila also benefit from these tariff cuts, expected to make high-end spirits far more affordable in India.

2. Luxury and Electric Vehicles

The trade deal will provide huge relief to Indian luxury car buyers. Import duties on certain British-made vehicles, including electric vehicles and internal combustion engine (ICE) cars, will be phased down from 110% to just 10% over five years. Iconic British automobile brands such as Rolls-Royce, Jaguar Land Rover, Bentley, and Aston Martin are among the biggest gainers, which will see significant price drops in the Indian market.

3. Cosmetics and Soft Drinks

The India-UK FTA reduces tariffs on UK cosmetics and personal care products as well, which will make imported beauty products more accessible to Indian consumers. Additionally, UK-origin soft drinks will now be available at reduced prices after the tariff cuts.

4. Chocolates and Confectionery

Sweet-toothed Indians can rejoice as import duties on chocolates, biscuits, and other confectionery items from the UK will fall dramatically from an average of 15% to as low as 3%. You can expect to see more British treats on Indian shelves at lower prices.

5. Medical Devices & Aerospace Components

The FTA will also reduce tariffs on medical equipment and aerospace parts. Tariffs on aerospace items will drop from 11% to 0%, helping with easier import of high-tech UK-origin components into India's aviation and healthcare sectors.

6. Seafood and Meat Imports

Indian importers will also benefit from low or zero tariffs on UK-origin seafood and meats, including salmon and lamb.

What Gets Cheaper for UK Consumers?

1. Indian Textiles and Apparel

On the export front, India is expected to gain immensely. All 1,143 categories of Indian textiles and apparel will now enter the UK duty-free, bringing India on par with other low-cost suppliers like Bangladesh and Cambodia. British consumers can expect lower prices and huge availability of Indian-made garments.

2. Leather Goods and Footwear

UK importers will now enjoy zero-duty access to Indian shoes, bags, and accessories, which is expected to boost demand for high-quality Indian leather products in global markets.

3. Gems, Jewellery, Carpets, Handicrafts

Indian gems, jewellery, carpets, and handicrafts will now face no import duties in the UK, strengthening India's position in the luxury and artisanal exports space.

4. Agriculture and Organic Products

The FTA opens up new avenues for Indian farmers and agri-exporters. Tea, coffee, spices, millets, jackfruit, pulses, pickles, and organic herbs will all benefit from reduced or zero tariffs, expanding their reach to the UK market.

5. Engineering Goods & Marine Products

Tariffs on Indian engineering products, electronics, and auto components are fully eliminated. Likewise, UK consumers will enjoy more affordable shrimp, tuna, and other processed seafood from India.