Potential benefits for UK trade as India FTA comes into force

By Oliver Catchpole

Published: 15 July, 2026

The Free Trade Agreement (FTA) between the UK and India has today (15 July) come into force, with tariff cuts and dedicated support for SMEs both up for grabs.

The deal will see India – one of the world’s fastest-growing consumer markets – remove or reduce tariffs on around 90% of UK product lines it currently taxes, while Britain will provide duty-free access to 99% of Indian exports.

To benefit from the tariff reductions, UK businesses must register with HMRC as the preferential rates are dependent on origin declarations.

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Described in The Independent as “the biggest and most important free trade agreement that the UK has signed since Brexit” by chair of the International Chamber of Commerce Karan Bilimoira, the agreement is expected to provide a boost for the Scotch whisky industry along with a host of other businesses across the UK.

In the long run, the deal could increase UK GDP by £4.8bn and bilateral trade by £25.5bn every year, according to the government.

Under the agreement, India will cut tariffs on Scotch from 150% to 75% immediately after it comes into force, with another drop to 40% after 10 years. This staged reduction is intended to give Indian producers time to adapt to the new deal.

A spokesperson for the Department for Business and Trade (DBT) told Harpers that this will make “the [Scotch whisky] sector far more competitive in what is already the world’s largest whisky market by volume”.

Nodjame Fouad, CEO, Aged Spirits and Champagne division at Pernod Ricard, added: “The opening up of the Indian market represents a significant opportunity for the UK as the world’s leading exporter of spirits, and a welcome boost for the Scotch whisky industry.

“It supports Scotland’s export ambitions, enhancing competitiveness in a key international market and reinforcing the contribution our industry makes to jobs, investment and economic growth across Scotland and the wider UK.  

“We are grateful to the UK and Indian Governments for their efforts in delivering this agreement and we will work hard to help realise its full potential.”

The Scotch Whisky Association (SWA) has previously said that the deal could increase exports of Scotch to India by £1 billion over the next five years.

While much smaller in the Indian market than whisky, gin will also receive the same tariff cuts in a potential boon for the sector.

Beyond tariffs, both the UK and India have signed up to greater alignment on standards, along with a joint commitment to release goods through customs within 48 hours of arrival – easing trade for businesses and looking to cut delays.

The FTA also includes a commitment to provide support for small and medium enterprises (SMEs) in navigating the Indian market, intending to “improve awareness of market opportunities, regulatory requirements and exporting procedures”, according to the DBT.

To register to complete orgin declarations with HMRC, or for more information, please click here.

Image Credit – Sahaj Patel on Unsplash

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