India-UK trade pact: What changes for autos, whisky, textiles, steel
New Delhi, Jun 18, 2026
Here are the key takeaways from the India-UK trade deal, from lower tariffs on cars and Scotch whisky to duty-free textile access, social security relief for professionals and steel export safeguards
The India-UK Comprehensive Economic and Trade Agreement (CETA) and the accompanying Double Contribution Convention (DCC) will come into force on July 15, kicking off a new phase in economic ties between the two countries. The agreements cover trade in goods and services, social security benefits for professionals, and market access across a range of sectors.
Prime Minister Narendra Modi said the pact would "significantly boost our bilateral trade and investment" and "unlock numerous opportunities for farmers, workers, MSMEs, startups and innovators".
Here are the key takeaways from the India-UK trade deal:
Automobiles: Lower duties under a quota system
One of the most closely watched provisions of the agreement relates to automobiles. India has agreed to reduce tariffs on automotive imports from the UK from levels of over 100 per cent to 10 per cent, subject to quotas.
Under the agreement, India will permit the import of 378,000 conventional-engine passenger vehicles from the UK at concessional customs duties over the first 15 years of the pact.
In the first year, 20,000 passenger vehicles across different engine categories will be allowed at reduced duty rates. The annual quota will rise to 37,000 units by the fifth year before stabilising at 15,000 units from the 15th year onward, with duties fixed at 10 per cent.
The agreement also opens opportunities for Indian vehicle manufacturers in the UK market. India will receive duty-free access for exports of electric, hybrid and hydrogen-powered passenger vehicles in specified price segments from the sixth year of the agreement.
At the same time, India has kept vehicles priced below GBP 40,000 outside the concessions framework, shielding the domestic mass-market electric vehicle segment.
Alcohol: Duty cuts on Scotch whisky spread over a decade
India has agreed to lower customs duties on UK whisky and gin from 150 per cent to 75 per cent immediately, with tariffs falling further to 40 per cent by the tenth year of the agreement.
The Confederation of Indian Alcoholic Beverage Companies (CIABC) said the gradual reduction would provide domestic manufacturers time to adapt.
"The tariff reduction on imported spirits will be phased over a period of 10 years, allowing the domestic industry time to adjust. Lower import duty on Scotch whisky will also help Indian producers using Scotch as an input for bottled-in-India products," CIABC Director General Anant S Iyer said, as reported by news agency PTI.
The industry body, however, called for a review of state-level excise and taxation policies, arguing that imported bottled-in-origin products already enjoy advantages in several states through lower duties, registration fees and taxes.
Textiles and apparel: Duty-free access expected to boost exports
The apparel industry has welcomed the agreement, saying duty-free access to the UK market could strengthen India's position in one of its key export destinations.
According to the Apparel Export Promotion Council (AEPC), Indian apparel exports to the UK currently stand at about $1.4 billion, while Britain's total apparel imports are valued at nearly $20 billion.
AEPC Chairman A Sakthivel said the agreement would create fresh opportunities for exporters.
"For India's apparel industry, the agreement is expected to unlock substantial opportunities by providing duty-free market access," he told PTI.
He added that the removal of tariff barriers would improve competitiveness and help Indian exporters expand their presence in the British market.
The commerce ministry has stated that tariffs of up to 12 per cent on textiles and clothing will fall to zero under the agreement.
Social security: Relief for Indian professionals in Britain
The Double Contribution Convention is expected to benefit a large section of Indian professionals working in the UK on temporary assignments.
Under the arrangement, employees transferred by Indian companies to the UK, and vice versa, for a limited period will not be required to make social security contributions in the host country for up to five years, provided they remain covered in their home country's system.
An official said about 90-95 per cent of Indian professionals employed by Indian companies operating in Britain are expected to benefit from the arrangement.
"If an employer is contributing in India for the social security of the employee, they do not have to pay in the UK. For that, they have to share a certificate of coverage. From July 15, Indian employers can start enjoying this exemption," the official was quoted as saying by PTI.
The provision is expected to be particularly significant for India's information technology sector. Around 75,000 Indian professionals are estimated to be working in the UK, while more than 900 Indian companies have operations there.
Steel: Market access secured despite UK safeguard measures
Steel emerged as one of the most sensitive issues during the final stages of implementing the agreement after Britain announced safeguard measures aimed at protecting its domestic industry.
The UK has decided to cut duty-free steel import quotas and impose a 50 per cent tariff on shipments exceeding prescribed limits.
According to Indian officials, about 85 per cent of India's steel exports to the UK have been kept outside the scope of these safeguard measures.
For the remaining exports, market access has been secured through a combination of country-specific quotas, residual quotas and access under the Authorised Use Scheme.
The measures cover steel exports worth around $137 million. Officials said the resolution of the steel issue helped clear the path for the implementation of the trade pact from July 15.
The agreement comes as India seeks to expand its manufacturing and export footprint across sectors. Both countries are aiming to double bilateral trade, currently estimated at around $60 billion, by 2030.
[The Business Standard]
