India shipped out smartphones worth a solid $1.5 billion to the UK in the 2024 calendar year. That’s quite the jump for tech trade, but not everything is up for grabs.
India has held its ground on some sensitive sectors, deciding not to reduce import duties on precious metals and optical fibres under the new free trade agreement (FTA).
One major headline grabber is the slash in car import duties—from a hefty 100% to just 10%. But don’t expect British car brands to flood Indian roads just yet. There’s a cap on how many can be imported, stretched over a 10 to 15-year period. And officials insist the access granted to UK automakers is “minuscule.” With India on track to double its car market to 10 million units in five to six years, the government seems to believe there’s room for both protection and progress.
The deal also opens up chances for India to step on the gas in auto exports, especially in internal combustion engine vehicles and parts. Whether that translates into real-world gains is something only time will tell.
The agreement brings some good news for spirits lovers. Import duties on whisky and gin from the UK have been halved from 150% to 75% and will drop further to 40% over the next ten years. There’s no mention of minimum import prices or quotas either.
Officials claim this is a “pragmatic” move. They argue it won’t hurt local producers or buyers and may even generate jobs in India’s bottling and packaging industry. But again, it’s too early to pop the cork on that assumption.
Yes, both sides finalised the FTA on May 7, but the actual implementation is still a long road ahead. The legal text is now being ‘scrubbed’—a tedious process that could take around three months.
After that, India’s Union Cabinet and the British Parliament will need to give the green light. If all goes well, it might still take over 15 months before anything actually kicks in.
Indian carmakers aren’t entirely thrilled. They’ve raised concerns about how little clarity there is on how the new terms will work in practice. One of the main issues? The certification process for who exactly is buying these imports.
The Society of Indian Automobile Manufacturers (Siam) has suggested that either itself or the Automotive Component Manufacturers Association of India should handle verification duties. They want the Ministry of Heavy Industries (MHI) to take charge of verifying user certificates, and the Ministry of External Affairs (MEA) to formally attest them. Industry voices are also asking for a single nodal officer to streamline the whole thing.
While India finalises this deal with the UK, there’s another conversation quietly unfolding—with China. New Chinese export controls, effective from April 4, are raising eyebrows globally. These restrictions apply to all countries and seem to be Beijing’s response to the US hiking tariffs.
China controls nearly 90% of the world’s rare earths—materials crucial for electronics, defence gear and electric vehicles. That puts India in a tight spot. Still, insiders in India’s electric two-wheeler sector say they may avoid the worst of it. Since they don’t export finished products to the US, their challenges might be limited to a bit more paperwork and delays.
Officials describe the India-UK FTA as a “gold-standard” agreement aiming for deep economic integration. That’s a bold label—but the final impact will hinge on how the nitty-gritty plays out over time. Legal clearances, domestic industry adaptations, and global shifts like China’s resource control will all shape the outcome.
