India’s UK Trade Deal Offers Tariff Cuts on Cakes, Cosmetics, Jet Engines—But Keeps Gold and Tea Protected

New Delhi, July 27, 2025: India has extended tariff concessions to an array of British goods under a new free trade agreement (FTA) signed with the United Kingdom, including pastries, pet food, and cosmetics, while shielding sectors deemed sensitive to domestic interests.

The Comprehensive Economic and Trade Agreement (CETA), signed on July 24, grants phased tariff cuts to nearly 90% of UK-origin products. According to the Global Trade Research Initiative (GTRI), the deal reflects a calibrated approach that opens India’s markets gradually, giving domestic manufacturers time to adjust.

Under the agreement, tariffs will be eliminated on a wide range of consumer goods like cakes, protein concentrates, pet foods, soaps, detergents, microwave ovens, air conditioners, and washing machines. In the personal care segment, India has agreed to phase out import duties on cosmetics and soaps currently at 22% and 11%, respectively over a 10-year period. Shaving creams and detergents will become duty-free immediately upon implementation.

Pastries and cakes, taxed at 33%, and protein concentrates at 44%, will see duties eliminated over 10 years, while pet food (22%) will benefit from a seven-year reduction schedule. Chocolates, facing a 33% duty, will become duty-free over seven years.

Industrial and recyclable goods also feature in the deal. Waste paper and silver bars, with duties of 11% and 10.75% respectively, will become tariff-free over a decade. Palladium will follow a similar timeline. Ferrous scrap will get immediate relief, while brass scrap will go duty-free in 10 years. Aluminium scrap, however, has been excluded from concessions.

In the aerospace and machinery sector, India will phase out its 8.25% import duty on turbo-jets (over 25kN thrust) over seven years.

Alcoholic beverages were also included but only at the premium end. India will reduce the steep 110% import duty on UK whisky, vodka, and gin but only for bottles priced above $6 per 750ml. These tariffs will drop to 75% in the first year and gradually to 40% by year 10.

Despite broad coverage, the agreement excludes several politically and economically sensitive items. Gold bars, coffee, tea, and sausages all currently taxed at high rates remain outside the scope of tariff reductions, a move seen as a safeguard for Indian farmers and local processors.

Microwave ovens, one of the few home appliances to get immediate duty elimination, stand in contrast to air conditioners and washing machines, which will see their 22% duties scrapped gradually over a decade.

The agreement will take effect in about a year, pending ratification by the UK Parliament. For India, the trade-off balances opening new markets with strategic protection of key sectors.