India Excludes British Wines from Duty Cuts in UK Free Trade Agreement

India’s recently concluded Free Trade Agreement (FTA) with the United Kingdom, announced on May 6, has notably excluded British wines from any import duty concessions. Additionally, the agreement offers only limited duty relief on UK beer imports. This strategic decision aims to protect domestic agricultural interests and maintain consistency in ongoing trade negotiations with the European Union.

The FTA, hailed as a significant milestone in bilateral trade, includes substantial tariff reductions on other British products. For instance, duties on Scotch whisky and gin will decrease from 150% to 75%, with a further reduction to 40% over the next decade. Similarly, import duties on British automobiles are set to drop from over 100% to 10%. In return, India anticipates reduced duties on its exports, such as garments and leather products, to the UK.

However, the exclusion of wines from duty cuts is significant. The European Union is a major player in the global wine market, and any concessions to the UK could have prompted similar demands from the EU, potentially complicating ongoing trade talks. By maintaining high duties on wine imports, India aims to avoid setting a precedent that could affect future negotiations.

The agreement also excludes several other sensitive agricultural products from tariff reductions, including dairy products, apples, cheese, oats, and vegetable oils. These exclusions reflect India’s cautious approach to safeguarding its domestic agricultural sector while pursuing broader trade liberalization.

The India-UK FTA is expected to enhance bilateral trade by £25.5 billion annually by 2040, benefiting various sectors in both countries. While the exclusion of wines from duty cuts may be disappointing for some, the overall agreement represents a significant step forward in strengthening economic ties between India and the UK.