India secures zero duty on 95% farm goods exports in UK Trade deal

INDIA – India has secured zero duties on 95 per cent of agriculture and processed food items by excluding dairy products, edible oils, and apples in the free trade agreement (FTA) with the UK.

On the other hand, Indian staples like turmeric, pepper, and cardamom; processed goods like mango pulp, pickles, and pulses; and marine products such as shrimp and tuna will enjoy duty-free access in the UK market.

In agriculture, the UK imports USD 37.52 billion worth of products, but imports from India are just USD 811 million.

“India’s farmers are poised to be the biggest winners of the FTA, which unlocks premium UK markets for their produce, matching or exceeding the benefits already enjoyed by exporters from Germany, the Netherlands, and other EU nations,” a commerce ministry official said.

This will lead to a reduction in the landed cost of these Indian products in the UK market, boosting India’s export and enhancing the income of domestic farmers.

With regard to the benefits for the blue economy, the FTA provides for zero-duty access for 99 per cent of exports, including shrimp, tuna, fishmeal, and feeds. These are currently taxed in the range of 4.2 – 8.5 per cent.

The FTA is set to help India’s food processing sector. India exports USD 14.07 billion of processed agricultural and food products globally per year. The UK imports USD 50.68 billion worth of processed items, but Indian products make up for a mere USD 309.5 million.

The news comes after India negotiated a comprehensive bilateral trade agreement with the USA after it imposed reciprocal tariffs including a 26% duty on Indian goods which was later paused for 90 days.

As reported by Reuters, India is currently engaging in trade negotiations with the USA, aiming to protect its 80 million small-scale dairy farmers from potential market disruptions due to increased imports.

The USA, whose dairy exports reached US$8.22 billion last year, is pushing for greater access to India’s dairy market, which remains shielded by high import duties and non-tariff barriers.

India accounts for nearly a quarter of global milk production, with output reaching 239 million metric tons, more than double the USA production of 103 million tons.

Given the small herd sizes of Indian farmers, typically two to three animals per farm, they face a disadvantage compared to large-scale U.S. dairy operations.

New Delhi has historically excluded dairy from bilateral trade agreements and is expected to maintain this stance, recognizing the sector’s economic and cultural significance. The Indian government is resisting pressure from Washington, ensuring that any trade deal does not undermine local milk producers.

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