India-UK FTA explainer:From cars to whisky gin, find here list of products set to become cheaper from today

Cars, whisky, clothes, and footwear that India imports from UK will become cheaper in India in a phased manner from Wednesday, 15 July, 2026. This is because the India-UK Free Trade Agreement (FTA), officially known as CETA, will come into effect from today. From Wednesday, 99% of Indian goods will be exported to the UK at zero tariff, while 99% of UK goods will be imported into India at an average tariff of 3%. India-UK trade size: How India UK entered the agreement? Negotiations for the agreement between India and the UK began on January 13, 2022, and were completed after nearly 3.5 years. After 14 rounds of negotiations spanning nearly 3.5 years, the agreement was signed on 24 July , 2025, by Commerce Minister Piyush Goyal and British Trade Secretary Jonathan Reynolds, in the presence of PM Narendra Modi and his UK counterpart Keir Starmer. Which items will become cheaper in India? From day one, India will remove tariffs on around 64% of UK products, including items such as salmon, lamb, aircraft parts, machinery and electronics. -GTRI The average tariff on goods imported from the UK will drop from 15% to 3%. Additionally, 85% of goods will become completely tariff-free over a span of 10 years. This will make several items cheaper: Whisky and Gin: India’s tariff on Scotch whisky and gin imported from the UK will be slashed from 150% to 75%. It will be further reduced to 40% by the tenth year of the agreement. Example: A bottle of Scotch worth ₹5,000 will be available for ₹3,500. Luxury Cars: Tariffs on UK cars (such as Jaguar Land Rover and Rolls-Royce) will come down from 100% to 10% under a quota system. This could make these cars 20% to 30% cheaper. Food and Beverages: Tariffs on salmon, lamb, chocolates, biscuits, and soft drinks imported from the UK will be reduced, making these products more affordable. Cosmetics and Medical Devices: Lower tariffs on UK cosmetics, medical equipment, and aerospace parts will make these goods cheaper, with tariffs dropping from 15% to 3%. Fashion and Clothing: Branded clothes, fashion products, and homeware coming from the UK will become cheaper. Similarly, furniture and electronics will also be available at lower prices.
Which Indian sectors will benefit? Sectors ranging from textiles to engineering, pharmaceuticals, and chemicals will benefit. Textile Sector: Indian apparel and home textiles (such as bedsheets and curtains), which previously faced an 8% to 12% tax in the UK, will now be completely tax-free. This will make our garments cheaper and far more competitive compared to countries like Bangladesh and Vietnam. Export hubs like Tiruppur, Surat, and Ludhiana could see up to 40% growth over the next three years. Jewellery and Leather Goods: There will no longer be any tax on jewellery and leather goods, such as bags and shoes, exported from India to the UK. This will greatly benefit small businesses (MSMEs) and luxury brands. Additionally, it will help expand India’s footprint across Europe through the UK. Engineering Goods and Auto Parts: The UK has eliminated import taxes on Indian machinery, engineering tools, and auto parts (such as car components). This will further strengthen the industrial supply chains of India, the UK, and Europe, benefiting manufacturing hubs like Pune, Chennai, and Gurugram. Pharmaceuticals and Medical Devices: Indian pharmaceutical companies will get an easier registration process for generic medicines in the UK. This will facilitate smoother access for Indian medicines into the UK’s National Health Service (NHS) and ensure faster drug approvals. Food, Tea, Spices, and Marine Products: The UK’s import tax on Basmati rice, marine products like shrimp, premium tea, and spices will be eliminated. This will provide a major boost to the export industries in regions like Assam, Gujarat, Kerala, and West Bengal. Chemicals and Specialty Materials: Reduced taxes on agrochemicals, plastics, and specialty chemicals will boost exports from key hubs like Gujarat and Maharashtra. Under this deal, India aims to double its chemical exports to the UK by 2030. Green Energy: This agreement will pave the way for joint ventures in renewable energy, including solar, green hydrogen, and electric vehicle (EV) infrastructure. The UK will invest further in India’s clean energy sector, leading to the co-development of new technologies.
How will this deal benefit the Indian economy? The FTA is highly beneficial for the Indian economy in several ways: Boost in Exports: 99% of Indian goods will be exported to the UK at zero tariff. This will benefit sectors such as textiles, leather, gems and jewelry, marine products, and engineering goods. India’s exports to the UK are projected to reach $29 billion by 2030. Job Creation: New jobs will be created in labor-intensive sectors like textiles and leather. In fact, employment in the textile sector has the potential to double. Boost to MSMEs: India’s 60 million (6 crore) MSMEs, which contribute to 40% of India’s total exports, will benefit significantly. This agreement will provide them with access to new markets and better profit margins. Increase in Investment: UK companies will increase their investments in India’s IT, financial services, and green technology sectors. This will strengthen both India’s manufacturing and service sectors. Economic Growth: This deal is expected to increase India-UK trade by 15% annually until 2030, helping India achieve its $100 billion trade target. Exceptions: India has protected some sensitive products. Exclusions reportedly include dairy products, apples, cheese, oats and selected animal and vegetable oils. Sensitive industrial products such as certain plastics, diamonds, silver, base stations, smartphones, television camera tubes and optical-fibre products are also excluded. – GTRI How many types of trade agreements are there? Free trade agreements are categorized and named differently based on their nature. These include: The World Trade Organization (WTO) broadly refers to all such economic engagements as RTAs (Regional Trade Agreements). How many FTAs has India signed? India has signed trade agreements with Sri Lanka, Bhutan, Thailand, Singapore, Malaysia, South Korea, Japan, Australia, the UAE, Mauritius, as well as the ASEAN and EFTA blocs. According to the Global Trade Research Initiative (GTRI), after securing deals with major Asian economies, India has shifted its FTA focus from the East (ASEAN, Japan, South Korea) toward Western partners. India is now prioritising FTAs with the EU and the US to expand its exports and strengthen trade relations with major Western economies.