The India-United Kingdom Comprehensive Economic and Trade Agreement (CETA) and the Agreement on Social Security – also referred to as the Double Contribution Convention (DCC), formally entered into force on Wednesday, July 15. The agreement allows nearly all Indian exports duty-free access to Britain. As part of the trade deal, India will also lower import duties on a range of British goods over a phased period.
As the deal comes into force, it is expected to make a wide range of products cheaper for consumers in both countries by reducing or eliminating customs duties, while a limited set of imported goods may continue to remain expensive or see little change due to tariff exclusions and phased implementation.
What will be cheaper after India-UK trade deal
Premium Scotch whisky and gin
Premium Scotch whisky and gin are among the products expected to become more affordable in India, as import tariffs on these spirits are set to be lowered in phases.
The duty on whisky, which currently stands at 150 per cent, will initially drop to 75 per cent before gradually decreasing to 40 per cent over the next decade, rendering imported British liquor far more accessible to consumers.
Luxury vehicles manufactured in the UK are likewise expected to see price reductions. Import taxes on a specified quota of British automobiles will decrease gradually, which could reduce the retail costs of prestigious brands like Jaguar Land Rover, Bentley, Aston Martin, and Rolls-Royce.
Indian consumers could also enjoy reduced pricing on a select British food and beverage items – such as chocolates, biscuits, salmon, lamb, soft drinks, and specialty packaged foods – as import duties are rolled back under the terms of the deal.
Furthermore, specific cosmetics, medical equipment, and industrial machinery brought in from the UK are poised to become more competitively priced over time.
Major boost for Indian exporters
Indian products are set to secure a major boost via duty-free entry into the UK marketplace. Labour-intensive sectors such as textiles and apparel, footwear, leather goods, gems and jewellery, seafood, engineering goods, automotive components, organic chemicals, and processed foods – are poised to gain a competitive edge, thereby unlocking fresh export avenues for Indian producers.
Closer bilateral investment and supply chains
The agreement could also stimulate higher investment and foster closer supply chain connectivity between the two nations.
Even so, consumers should not expect every imported British products to drop in price right away. A number of sensitive agricultural goods, dairy products, and other protected sectors have been excluded from the tariff cuts or remain subject to protective measures, meaning their prices are unlikely to witness significant changes.
Gradual phase-in for select reductions
Similarly, for items where tax cuts are spread out over multiple years or bound to specific import limits, any drop in retail costs will likely manifest gradually rather than overnight.
The final price paid by consumers will also be influenced by factors such as shipping fees, currency fluctuations, local taxation, and the pricing frameworks adopted by retailers.
The long-term vision of the trade accord
While more economical imports stand to benefit consumers, the broader goal of the agreement is to boost bilateral commerce, generate jobs through increased exports, and draw in more investment. The long-term impact on retail prices will ultimately hinge on how quickly the tariff cuts are rolled out and whether companies choose to pass these benefits of lower import duties to consumers.
