India and the UK have concluded a free trade agreement that will slash import duties on more than 90% of tariff lines between the two countries.

Details of the agreement are awaited, but press releases from both sides suggest that cosmetics, aerospace components, lamb, medical devices, electrical machinery, soft drinks, chocolate and biscuits, textiles, footwear, selected food products, and Scotch whisky are part of the deal.

Marine products, sports goods and toys, gems and jewellery, engineering goods, auto parts and engines, and organic chemicals are also likely to be included.

Currently, textiles, footwear, carpets, cars, and marine products face UK tariffs ranging from 4% to 16%.

The deal’s true test lies in how the UK’s Carbon Border Adjustment Mechanism is addressed, said think tank GTRI. If Indian exports continue to face CBAM levies while UK goods enter India duty-free, it risks turning a balanced FTA into a one-sided bargain.

“Let’s hope this elephant in the room wasn’t ignored,” said GTRI founder Ajay Srivastava.

India and the UK have bilateral trade worth about $60 billion, which the Indian government expects to double by 2030.

Highlights from the Indian government include:

• India will benefit from tariff elimination on approximately 99% of tariff lines, covering nearly 100% of trade value.
• The deal is expected to deliver significant employment gains in India.
• Eased mobility for professionals, including contractual service suppliers, business visitors, investors, intra-corporate transferees, and their partners and dependent children — with the right to work.
• Exemption from social security contributions in the UK for Indian workers temporarily posted there and their employers, for up to three years, under the Double Contribution Convention.
• Non-tariff barriers will be addressed to ensure smoother flow of goods and services.

Highlights from the UK government include:

• India has agreed to slash tariffs on 90% of UK export tariff lines, with 85% becoming fully tariff-free within 10 years. This includes key British exports such as whisky, gin, cosmetics, lamb, medical devices, aerospace parts, and more.
• Scotch and gin tariffs will be cut from 150% to 75%, and down to 40% by year 10.
• Digital trade facilitation and streamlined customs to support SMEs entering India.
• India has agreed to first-ever FTA chapters on anti-corruption, labour rights, gender equity, and consumer protection, marking a diplomatic and values-based win for the UK.
• The UK has protected the NHS, maintained its points-based immigration system, and upheld high food safety and animal welfare standards.

The Indian government also plans to use the UK deal as a template for ongoing FTA negotiations with other countries, including the United States, European Union, and Australia.

The current Indian government had criticised older FTAs signed by previous regimes as being lopsided.