The India-UK trade deal opens up one of the world’s largest consumer markets to Indian exporters while making several premium British products cheaper for Indian buyers. The agreement is also expected to deepen investment ties, create jobs and give a fresh push to India’s manufacturing and services sectors, according to trade experts.
For Indian consumers, the first visible impact could eventually be lower prices of imported Scotch whisky, premium British cars, cosmetics, chocolates and select food products. For Indian businesses, however, the bigger story lies in unprecedented access to the UK market.
Zero-duty access to 99 pc Indian products
The agreement gives zero-duty access to nearly 99 per cent of Indian exports to the UK, covering almost the entire value of goods India sells there. This implies that thousands of Indian products which earlier attracted import duties in Britain can now enter the market duty-free, making them more competitive against products from Europe, China and other countries.
The biggest beneficiaries are expected to be labour-intensive sectors that employ millions of Indians, including textiles and garments, leather and footwear, gems and jewellery, marine products, engineering goods, auto components, processed food, chemicals, pharmaceuticals and agricultural products.
Industry expects the tariff elimination to improve profit margins, encourage higher production and generate new employment across manufacturing clusters. While the UK is already India’s fifth-largest merchandise export destination, it accounts for only around 1 per cent of India's merchandise imports, indicating significant headroom for a more diversified trade relationship. By lowering tariff barriers, improving market access and simplifying cross-border trade, the agreement is expected to unlock new opportunities for Indian exporters, particularly MSMEs.
Indian IT companies, consulting firms, engineers, architects, accountants, healthcare professionals and education service providers are expected to benefit from easier market access and greater regulatory certainty in the UK. The agreement covers 137 service sub-sectors, making it one of India's most comprehensive services-focused trade pacts.
Premium British cars, medical devices to get cheaper
Consumers may not notice overnight price cuts, but several imported British products are expected to become more affordable as tariffs are reduced in phases. Among the biggest beneficiaries are scotch whisky, gin, premium British cars, luxury motorcycles, cosmetics, chocolates, biscuits, medical devices and select food products.
The reduction, however, won’t happen instantly across all products. For example, import duties on eligible British-made vehicles will fall gradually under a quota system over several years. Similarly, tariffs on Scotch whisky will also decline in phases rather than overnight.
Also read: India-UK trade pact comes into effect
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