UK-India FTA goes live today: From whisky to premium cars, what gets cheaper and which Indian sectors gain

India’s trade deal with the United Kingdom (UK) comes into force today (July 15), opening the British market to nearly all Indian exports. From today, several British products, from Scotch whisky and luxury cars to chocolates and cosmetics, will be cheaper in India.

The Comprehensive Economic and Trade Agreement (CETA) was signed in London on July 24, 2025, by Commerce and Industry Minister Piyush Goyal and his UK counterpart Jonathan Reynolds in the presence of Prime Minister Narendra Modi and UK Prime Minister Keir Starmer.

The agreement gives 99% of Indian exports duty-free access to the UK. India has selectively reduced tariffs on British goods over a phased period. New Delhi has, however, protected sensitive domestic sectors.

Calling the agreement a “triumph of economic statecraft”, Goyal said it would unlock new opportunities for Indian exporters. 

“By securing immediate duty-free access on 99% of our tariff lines, we have systematically dismantled long-standing tariff walls. This will effectively level the playing field, allowing our textiles, leather, marine, engineering, and processed food sectors to compete with no disadvantage and supply their world-class products.”

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What Gets Cheaper In India?

Several British consumer products are set to become cheaper as tariff cuts begin under the agreement.

The biggest winner is Scotch whisky. Import duty on British whisky will be cut from 150% to 75% immediately before falling further to 40% over the next 10 years. Gin will also benefit from lower tariffs.

Premium British cars will also become more affordable. Tariffs on fully built vehicles, currently as high as 110%, will be gradually reduced to 10% over 10 years under a quota system.

Luxury brands such as Rolls-Royce, Aston Martin, McLaren, and Land Rover are expected to benefit.

Access for British electric and hybrid vehicles will also be phased in through quotas to protect India’s domestic auto industry.

British exports such as chocolates, sweet biscuits, soft drinks, cosmetics, and other consumer goods will also become cheaper as tariffs are lowered.

Which Indian Sectors Stand To Gain?

The biggest gains are on the export side.

Indian exporters will enjoy zero-duty access across several key sectors. UK tariffs of up to 70% on processed food, 21.5% on marine products, 18% on engineering goods and auto components, 16% on leather and footwear, 12% on textiles and clothing, and 8% on chemicals and pharmaceutical products will be eliminated.

The Commerce Ministry said the agreement will improve the competitiveness of Indian products, create opportunities for farmers, fishermen, workers, MSMEs and manufacturers, and strengthen India’s position in global value chains.

India, however, has kept several sensitive sectors outside the deal, including dairy products, cereals, millets, edible oils, oilseeds, apples, and several vegetables.

Agriculture And Processed Food

The UK is a premium market for Indian tea, mangoes, grapes, spices, and processed food.

India exports processed food worth $14.07 billion globally, while the UK imports products worth $50.68 billion, but Indian products account for only $309.5 million of those imports.

The government expects exports of agricultural and processed food products to rise by more than 50% over the next three years. 

States including Maharashtra, Gujarat, Kerala, and the northeastern states are expected to benefit.

Coffee, Tea, And Spices

Duty-free access is expected to boost exports of value-added products, especially instant coffee.

The government says Indian exporters will now compete on equal terms with suppliers from countries such as Germany, Spain, and the Netherlands in the UK market.

Marine Products

India exported marine products worth $8.09 billion in 2022-23.

The removal of UK tariffs is expected to boost exports of shrimp, tuna, fishmeal and processed seafood while improving returns for exporters and coastal fishing communities.

States such as Kerala, Andhra Pradesh, Gujarat, Tamil Nadu, and Odisha are expected to benefit.

Textiles And Clothing

India’s textiles and clothing exports will now have zero duty, down from the earlier 12%. 

India had been facing a duty disadvantage vis-à-vis Bangladesh, Pakistan, and Cambodia, which had duty-free access to the UK market.

Manufacturing hubs, including Tiruppur, Surat, Ludhiana, Bhadohi, and Moradabad, are expected to see higher demand.

Pharmaceuticals

India exports pharmaceuticals worth $23.31 billion globally, while the UK imports nearly $30 billion worth of medicines annually.

The zero-duty access is expected to make Indian generic medicines more competitive in India’s largest pharmaceutical export market, Europe.

Medical devices such as surgical instruments, diagnostic equipment, ECG machines, and X-ray systems will also benefit from duty-free access.

Leather And Footwear

The UK imports leather and footwear worth $8.5 billion, while India’s current exports to the country stand at $440 million. Products that earlier attracted duties of up to 16% will now enter the UK duty-free.

The government expects India to gain at least 5% additional market share in the UK within one to two years.

Exports could eventually exceed $900 million, with manufacturers in Uttar Pradesh, Tamil Nadu, West Bengal and Delhi-NCR expected to benefit.

Services And Mobility

The UK has offered one of its widest-ever commitments on services, covering all major sectors and 137 sub-sectors of interest to India.

Indian companies in IT, financial services, healthcare, education, engineering, telecom, and consultancy are expected to benefit from improved market access.

The agreement also creates dedicated mobility routes for business visitors, intra-company transferees, contractual service suppliers, independent professionals, and investors.

In a first, 1,800 Indian chefs, yoga instructors, and classical musicians will receive dedicated annual mobility opportunities under the agreement.

Social Security Relief

The accompanying Social Security Agreement exempts Indian professionals and employers from making dual social security contributions during temporary assignments in the UK.

The exemption period has been extended from three years to five years.

The government estimates that more than 75,000 Indian professionals and over 900 companies will benefit, with savings of over ₹4,000 crore through the Double Contribution Convention.

What India Opened And What It Protected

While India secured duty-free access for 99% of its exports to the UK, it has opened 89.5% of its tariff lines, covering 91% of British exports. However, only 24.5% of UK exports will receive immediate duty-free access.

India has excluded sensitive sectors such as dairy, cereals, millets, pulses, edible oils, apples, gold, jewellery, lab-grown diamonds, smartphones, optical fibre, critical energy products and marine vessels.

For sectors being promoted under Make in India and the Production-Linked Incentive (PLI) scheme, tariff reductions will be phased in over five, seven, or ten years.

Trade between India and the UK currently stands at $56 billion. Both countries aim to double it by 2030.