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Indian Express
19 minutes ago
- Indian Express
India-UK FTA: Import of Britain-made luxury cars to get cheaper
Luxury cars made in the United Kingdom will become cheaper in India, with the India-UK Comprehensive Economic and Trade Agreement (CETA) introducing tariff-rate quotas (TRQ) for passenger cars and trucks, which will allow automakers to export vehicles at reduced tariffs, limited by quotas. Under the agreement, tariffs on imports of internal combustion engine (ICE) cars will be slashed to 30-50 per cent in the first year of implementation, with the benefit limited to a quota of 20,000 cars. The tariffs will be reduced gradually, and after 15 years, they will become 10 per cent, with the quota set at 15,000 units. For out-of-quota imports of ICE cars, the duties are reduced to 60-95 per cent in the first year, and further to 45-50 per cent from the tenth year onwards. Currently, India's import tariffs on passenger vehicles range from 70-110 per cent while those on trucks stand at 40 per cent. Industry executives said that import quotas have been implemented to avoid sudden surges in imports and safeguard the Indian auto industry. This reduction, ranging from 16 per cent to 56 per cent over a period up to 5 years on ICE vehicles up to 2500 cc (diesel)/3000 cc (petrol) and 80 per cent to 100 per cent over a period of 5 years on ICE vehicles more than 2500 cc (diesel)/3000 cc (petrol), is expected to make high-end vehicles more accessible. For electric vehicles (EVs), hybrids, and hydrogen fuel-based cars, tariffs have been eliminated entirely for units priced under £40,000 CIF (cost, insurance and freight value). For zero-emission cars priced between £40,000 to £80,000, tariffs are reduced to 50 per cent and a quota of 400, which from the fifteenth year will become 10 per cent and 2,000 respectively. For more expensive zero-emission cars (above £80,000), duties will start at 40 per cent with a quote of 4,000 units, which from the fifteenth year will become 10 per cent and 20,000 respectively. The new tariff rates are likely to benefit automakers such as Jaguar Land Rover. It is worth noting that the agreement does not provide for reduced out-of-quota duties on zero-emission vehicles, a decision that will provide some relief to domestic EV and hybrid players. In 2024-25, India's car imports from the UK fell by 46 per cent to $72 million from $134 million in 2023-24. For ICE trucks, the tariffs are slashed to 37 per cent for the first year, with a quota of 2,500. From the tenth year onwards, tariffs drop further to 8.8 per cent, with the quota set at 3,500. The agreement does not reduce duties for electric or hydrogen-based trucks. 'The substantial reduction of import duties to 10 per cent in 5 years for UK cars represents one of the most significant outcomes of the FTA and is poised to transform the car market in India, particularly for Completely Built Units (CBUs) due to the drastic duty cut. However, it is crucial that the cars meet the originating criteria of 35 per cent of Qualifying Value Content ('QVC') i.e. the material of UK origin is 35 per cent of total material used,' said Saurabh Agarwal, partner and automotive tax leader at EY India. He added that since the reduced duty benefits apply to all automobiles manufactured in factories located in the UK, non-UK carmakers may consider establishing factories in the UK to take advantage of the reduced rates and maintain their market share in India. Aggam Walia is a Correspondent at The Indian Express, reporting on power, renewables, and mining. His work unpacks intricate ties between corporations, government, and policy, often relying on documents sourced via the RTI Act. Off the beat, he enjoys running through Delhi's parks and forests, walking to places, and cooking pasta. ... Read More Soumyarendra Barik is Special Correspondent with The Indian Express and reports on the intersection of technology, policy and society. With over five years of newsroom experience, he has reported on issues of gig workers' rights, privacy, India's prevalent digital divide and a range of other policy interventions that impact big tech companies. He once also tailed a food delivery worker for over 12 hours to quantify the amount of money they make, and the pain they go through while doing so. In his free time, he likes to nerd about watches, Formula 1 and football. ... Read More
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Business Standard
19 minutes ago
- Business Standard
India, UK dismantle trade walls with landmark deal amid global tensions
India and the United Kingdom (UK) on Thursday signed a modern and comprehensive trade agreement, marking a major milestone in their bilateral relationship at a time of rising geopolitical polarisation and trade wars. Under the agreement, 99 per cent of Indian exports will enter the UK duty-free, while 90 per cent of UK goods will gain market access in India with zero tariffs. The deal, known as the Comprehensive Economic and Trade Agreement (CETA), was signed by Union Commerce and Industry Minister Piyush Goyal and his British counterpart Jonathan Reynolds, 42 months after negotiations began in January 2022. The signing took place in the presence of Prime Minister Narendra Modi and his British counterpart Keir Starmer at Chequers, the official countryside retreat of the British PM, in the Chiltern Hills of Buckinghamshire. 'This agreement is more than just an economic partnership; it is a blueprint for shared prosperity. On the one hand, it paves the way for enhanced market access in the UK for Indian textiles, footwear, gems and jewellery, seafood, and engineering goods…. On the other hand, UK-made products such as medical devices and aerospace components will become more accessible and affordable for Indian consumers and industries,' Modi said during the joint press statement in the UK. The agreement will come into effect once ratified by both countries. While the Union Cabinet in India has approved the deal, it still requires approval from the UK Parliament. CETA will reduce India's applied trade-weighted average tariff on goods imports from the UK from 15 per cent to 3 per cent, according to the UK government. However, the agreement does not address how to deal with the UK's Carbon Border Adjustment Mechanism when it comes into force in January 2027, despite India having raised concerns. India has granted tariff concessions on alcohol and automobiles -- key demands from the UK -- though in a staggered manner. Tariffs on whisky will be reduced from 150 per cent to 40 per cent over 10 years. For cars, where tariffs currently stand as high as 110 per cent, rates will fall to 10 per cent but within a quota. India will also eliminate or gradually phase out duties on consumer goods including soaps, perfumes, shaving creams and nail polish. However, the deal does not extend concessions to electric, hybrid and hydrogen-powered vehicles for the first five years. Tariff cuts have also excluded products such as apples, cheese, whey, gold bars, and smartphones, with India seeking to protect sensitive domestic sectors. Britain, in turn, has excluded meat, rice, sugar and eggs from tariff liberalisation. A standalone Double Contributions Convention (DCC) was also signed alongside the CETA. The treaty will prevent double payment of social security contributions -- roughly 20 per cent -- for a period of three years, benefiting an estimated 75,000 Indian professionals working in the UK. As part of the deal, India has committed to granting UK firms access to its vast government procurement market. British companies will be able to bid for around 40,000 tenders annually, with a total value of at least £38 billion. UK-origin goods with just 20 per cent domestic content will be treated as 'Class II' local suppliers under India's Public Procurement Order, a category previously reserved for Indian suppliers with 20–50 per cent local content. Experts said the move signals a shift away from using public procurement as a lever for domestic industrial development. 'The 20 per cent local content rule allows UK firms to use up to 80 per cent inputs from third countries -- such as China or the European Union -- while still receiving preferential treatment, effectively diluting the benefits that programs like 'Make in India' and Atmanirbhar Bharat were designed to protect,' according to a report released by Delhi-based think tank GTRI.
The Hindu
19 minutes ago
- The Hindu
The India-U.K. FTA spells a poor deal for public health
India and the United Kingdom have signed their Free Trade Agreement (FTA), with the Union Commerce and Industry Minister, Piyush Goyal, and the British Business and Trade Secretary, Jonathan Reynolds, signing the deal on July 24, 2025, during the visit of Prime Minister Narendra Modi to the U.K. On July 22, 2025, the Union Cabinet, Government of India had approved the FTA. Officially called the Comprehensive Economic and Trade Agreement, this FTA was first announced on the conclusion of negotiations on May 6, 2025. The India-U.K. FTA is good news from the economic perspectives of both countries. However, the FTA could pose a public health challenge for India. It will allow tariff-free entry — and thus lower prices — for U.K.-made food products such as biscuits, chocolates and soft drinks in India, many of which would fit into the categorisation of High Fat, Sugar and Salt (HFSS), posing grave long-term health risks. Cheaper prices supplemented by the expected aggressive marketing and advertising campaigns could prove harmful from the point of view of the health of citizens. The case of Mexico Concerns about the FTA and its adverse public health impact are not hypothetical. In 1992, when the North American Free Trade Agreement (NAFTA) was signed between Mexico, the United States and Canada, Mexico made the mistake of not implementing robust public health safeguards. In the years that followed, Mexico experienced the following: a dramatic rise in imports of cheap, sugary drinks, snacks and processed foods; a surge in the consumption of HFSS food products, and a steep rise in diet-related diseases, obesity and diabetes. Mexico could halt the rise in the sale of HFSS products and manage lifestyle diseases only when it introduced stringent public health regulatory mechanisms such as a 'Soda Tax' and warning labels upfront in 2014. From a public health viewpoint, the India-U.K. FTA is a concern for India. While the sale of unhealthy food products in the U.K. is relatively better regulated, the regulatory framework is sub-optimal in India. For example, the U.K. has implemented a ban on the advertising of HFSS products on television and online. The ban on such TV advertisements before 9 p.m., and a complete ban on paid online advertisements for HFSS products will come into effect on October 1, 2025. Similarly, the U.K.'s traffic light Front-of-Pack Nutrition Labelling (FOPNL) system uses a colour-coded system to help consumers quickly understand the nutritional content of packaged foods and drinks. For example, green indicates low levels of fat, saturated fat, sugar, and salt, amber indicates medium, while red indicates high. This system helps consumers make healthier choices. India lacks binding restrictions on junk food advertisements targeting children; the existing regulations are not effectively enforced and routinely flouted. India relies on self-regulation through the Advertising Standards Council of India, which is an industry body. There is ample evidence that in the food sector 'industry self-regulation' is rarely and partially effective. There are a few regulations that prohibit misleading advertisements, i.e., the Advertising Code of the Ministry of Information and Broadcasting; however, regulatory bodies are often unable to identify misleading advertisements or, if done so, no penalty is assigned. The cartoon mascots on food products targeted at children on the one hand and celebrity endorsements on the other normalise unhealthy choices. The use of celebrities and sportspersons are key to these tactics. Many of these celebrities have privately acknowledged that they do not use the products which they publicly promote and advertise. Yet, such deceitful behaviour has never resulted in social or public outrage. The problem with India's 'star rating' In India, the issue of a mandatory FOPNL is pending for want of a decision on the right type of labels and amendments under the Food Safety and Standards (Labelling and Display) Regulations, 2020. While evidence from various studies is that all types of warning labels help in reducing the consumption of HFSS, the most effective are the use of warning labels. Yet, Indian authorities are more interested in the use of 'star rating', which could be misleading and less effective. Therefore, the process of introducing a warning system on packaged food is slow. For example, in September 2022, there were proposed amendments to introduce mandatory warning labels. Yet, three years later, the amendments remain on paper. After a Public Interest Litigation in April 2025, the Supreme Court of India has directed the authorities to make a decision on warning labels in a time-bound manner. Many independent subject experts believe that a part of the reason for the delay in the adoption of the Food Safety and Standards Authority of India (FSSAI)'s 2022 draft regulations for FOPNL is because of industry lobbying — this has diluted the proposals, opting for 'star ratings' that are confusing instead of clear warnings such as Chile's black octagonal labels (when 'food products exceed certain thresholds of sugar, sodium, saturated fat, and/or calories'). India and many parts of the world are already facing a challenge of rising lifestyle diseases. In March 2025, The Lancet published two studies which indicated that obesity is on the rise across large parts of the world. Ultra Processed Food (UPF) and HFSS food items have witnessed a CAGR of 13.3%, in India, from 2011-21. Not surprisingly, the burden of lifestyle diseases such as obesity, diabetes and hypertension is rising at an alarming rate, in all age groups — more so in children and adolescents. A position statement on FOPNL in India, released in June 2025 and signed by 29 organisations, provided comprehensive evidence on the harmful effects of HFSS and UPF; it also advocated having warning labels being a mandatory part of HFSS and UPF packages. Commercial activities, i.e., trade and treaties have been integral part of human life and the economic ambitions of nations. The FTAs have economic benefits and multiple rationales. However, getting cheaper junk food as a result of an FTA can be costly in public health terms. These apprehensions are founded in sound global evidence. In fact, in the last decade, global health agencies have begun talking about the Commercial Determinants of Health — the conditions, actions and omissions by commercial actors that affect health. There is news that India may sign another deal, the India-European Free Trade Agreement Trade and Economic Partnership Agreement (TEPA), involving Iceland, Liechtenstein, Norway, and Switzerland, in October 2025. Trade deals and FTAs are likely to be signed with some more countries. They could be good for the economy, but from the point of view of public health they could prove to be the Trojan horses of non-communicable diseases, unless sufficient safe-guards are implemented. There is a need to balance the economic benefits of FTAs with the need to protect public health and ensure restrictions on the marketing and labelling of food products. It is still not late Now that the India-U.K. FTA has been signed, the legal text will be drafted in the weeks ahead, and this is the opportunity for India to make the right move, it needs to act immediately to mitigate the FTA's public health impact. It is time for strong measures to regulate the advertising of HFSS, as also suggested in the Economic Survey 2024-25 and in line with the recent 'Dietary Guidelines for Indians', published by the National Institute of Nutrition in May 2024. The mandatory FOPNL in the form of warning labels should be implemented at the earliest. The proposed 'sugar boards' and 'Oil Boards' in schools are a good entry point to having 'health promoting schools. However, 'a more holistic approach of 'HFSS boards' needs to be considered. School meals and school college canteens should stop the sale of packaged and unhealthy food items. Protective measures must be implemented with urgency to counter the potential effects of current and future FTAs. Public health practitioners and health policymakers need to be more engaged on issues that are related to trade deals, and when it comes to ultra-processed food and high fat, salt and sugar food. It is an issue of public health, which affects nearly every Indian in every age group, and a subject that must be treated with urgency. Dr. Chandrakant Lahariya is a practising physician who has worked with the World Health Organization and other United Nations agencies for nearly 17 years. Dr. Arun Gupta is a paediatrician and the lead of Nutrition Advocacy in Public Interest–India (NAPi)
