Media365
India’s Comprehensive Economic and Trade Agreement (CETA) with the United Kingdom will come into force on July 15, marking one of the most significant trade liberalisation measures undertaken by India with a developed economy. While nearly two-thirds of India’s tariff lines will become duty-free immediately, the biggest commercial gains for British exporters will come through phased tariff reductions across a handful of high-value sectors over the next decade.
According to the tariff schedule under the agreement, India has eliminated customs duties immediately on 64 per cent of its tariff lines. However, these products account for only around 18 per cent of the UK’s existing exports to India.
The larger commercial opportunity lies in another 24 per cent of tariff lines, representing nearly 66 per cent of current UK exports to India, where import duties will be gradually reduced to zero over periods extending up to 10 years. Around 12% of tariff lines remain outside the agreement, allowing India to continue protecting strategically important and sensitive industries.
Silver emerges as the biggest beneficiary
Silver is expected to be the single largest commercial winner under the agreement.
India imported nearly US$4.93 billion worth of 99.9 per cent purity silver bars from the UK in FY2025-26, making Britain India’s largest supplier of refined silver with a 45.4% share of total silver-bar imports.
The import duty on these silver bars will be phased out over a 10-year period, although imports will continue to require licences from the Directorate General of Foreign Trade (DGFT).
Given the scale of existing trade, no other UK export category stands to gain as much in absolute value.
Premium automobiles get unprecedented market access
The agreement also marks the first time India has agreed under a free trade agreement to significantly lower duties on fully built premium passenger vehicles from the UK.
Under tariff-rate quotas, customs duty on large internal combustion engine (ICE) cars will decline from the existing 110 per cent to just 10 per cent by the fifth year of implementation.
Premium electric vehicles, hybrid cars and hydrogen-powered vehicles will begin receiving tariff concessions only from the sixth year onwards, effectively providing India’s domestic EV industry an additional five years of protection.
Lower-priced electric vehicles remain excluded from the concessions, reflecting India’s cautious approach towards opening its automobile market.
Trade experts believe these provisions could also increase pressure from future FTA partners seeking similar access to India’s auto sector.
Scotch whisky and premium spirits receive major tariff relief. Premium alcoholic beverages are another major beneficiary of the trade pact.
India’s import duty on Scotch whisky will be cut immediately from 150 to 75 per cent, before declining further to 40 per cent over a period of 10 years. Tariff concessions have also been extended to premium brandy, bourbon, rum, gin, vodka, tequila, cider, sake and liqueurs.
However, these benefits will be available subject to minimum import price conditions, ensuring that tariff reductions primarily favour premium and high-value products rather than lower-priced imports.
Aerospace sector gains from lower import duties
The aerospace industry is also expected to benefit substantially under the agreement. Import duties on turbo-jets worth around US$340 million will be phased out over seven years, while several aircraft components and aviation parts will receive immediate duty-free access.
The move is expected to support India’s rapidly expanding aviation industry and maintenance ecosystem by reducing input costs for airlines and aerospace companies.
Mixed outcome for industrial raw materials
The agreement also provides tariff relief for several industrial raw materials.
Iron and steel scrap will become duty-free immediately, while duties on copper scrap, brass scrap, lead scrap, stainless-steel scrap and waste paper will be gradually eliminated over time.
These concessions are expected to benefit Indian manufacturing industries that rely on imported recyclable raw materials.
Sensitive sectors remain protected
Despite the broad market opening, India has retained protection for several sensitive product categories.
No tariff concessions have been extended to imports of gold bars, aluminium scrap, telecom and data communication equipment, and calcined petroleum coke, despite the UK’s export interest in these sectors.
The exclusions underline India’s strategy of balancing trade liberalisation with the need to safeguard domestic manufacturing and strategic industries.
As the India–UK CETA becomes operational from July 15, the agreement shifts from negotiation to implementation. While the treaty creates new opportunities for exporters in sectors such as silver, premium automobiles, aerospace and premium spirits, its long-term success will depend on how quickly businesses on both sides utilise the preferential market access created under the pact.
