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Trade policy, tariffs and trade agreements

How India trades: its policy, its tariffs and its agreements with other countries.

Showing 1 of 2 articles, those that changed from 1 to 30 June 2026.Show all

India's trade agreements

Prelims and Mains

LeadIndia's new trade agreements: the pact with the United Kingdom comes into forceJuly 2026

Why in news

The Comprehensive Economic and Trade Agreement between India and the United Kingdom came into force on 15 July 2026, with a separate convention on social security. The pact with Oman had come into force on 1 June.

Background

In 2019 India stayed out of the Regional Comprehensive Economic Partnership, fearing a flood of imports.
Since 2022 it has changed course, signing with the United Arab Emirates, Australia, the European Free Trade Association, the United Kingdom, Oman and New Zealand, and concluding talks with the European Union.
The new partners are mostly developed economies whose exports do not compete with India's labour intensive goods.

What India gets

The United Kingdom removed or cut duties on about 99 per cent of its tariff lines for Indian goods, most of them at once.

The gain is largest for textiles, leather, gems and jewellery, and marine products.
Services: commitments in all major sectors, and entry for some Indian professionals.
Social security: Indian workers posted to the United Kingdom for up to five years do not pay into its social security as well as India's.

What India gives, and what it protects

India cuts duties on about nine tenths of its lines, but in phases.
Kept out: dairy, cereals, apples, edible oils and gold.
Cars: lower duty only within a quota. This is the first time India has cut car tariffs in a trade pact.
British firms may bid for central government purchases.

Do such agreements work?

India's earlier pacts in Asia widened its deficits, and exporters made little use of the lower duties.
The reason: rules of origin and paperwork cost more than the duty saved, above all for small firms.

Tariffs are no longer the main barrier. Standards, and measures such as Europe's carbon border tax, now matter more.
A signed pact can be undercut from outside it: the United Kingdom put new duties on steel weeks before the start.

The way forward

Help small exporters claim the preference: simple certificates of origin, and help desks.
Raise quality and standards at home, since that is what the buyer tests.
Fix inverted duties, where the input is taxed more than the finished good.
Review each pact after a few years against its promises.

Prelims facts

India and United Kingdom pact: signed 24 July 2025, in force 15 July 2026.
India and Oman pact: signed in Muscat in December 2025, in force 1 June 2026. Oman is India's second such partner in the Gulf, after the United Arab Emirates.
Dairy is kept out of India's offers.
A trade agreement is approved by the Union Cabinet; it does not need ratification by Parliament.
The European Free Trade Association has four members: Switzerland, Norway, Iceland and Liechtenstein.

Open the lead on its own page

In 2019 India stayed out of the Regional Comprehensive Economic Partnership, fearing a flood of imports.

What changed

1 Jun 2026Newnewly added
- The India and Oman Comprehensive Economic Partnership Agreement (CEPA), signed in Muscat on 18 December 2025, came into force on 1 June 2026.
- Oman offers duty free entry on 98.08 per cent of its tariff lines, and the pact also covers services and professional mobility.
- Oman's ports of Duqm and Salalah lie outside the Strait of Hormuz, so the pact helps keep supplies moving during the West Asian disruption.
- Oman is a member of the Gulf Cooperation Council, and this is India's second CEPA in the Gulf after the one with the UAE.
Mains: The gains depend on helping small exporters claim the preference, since complex rules of origin have kept India's use of free trade agreement preferences low.
The Hindu, 1 Jun 2026: India, Oman free trade pact comes into force (opens in a new tab) · The Hindu, 9 Jun 2026 · SteelOrbis, 1 Jun 2026: India and Oman FTA to come into effect from June 1, 2026 (opens in a new tab)

Show history (3 other updates)

24 Sep 2026newly added
- India and New Zealand exchanged ratification documents, and their free trade agreement, signed on 27 April 2026, enters into force on 20 October 2026.
- India and the EU will sign their free trade agreement, concluded in January 2026, in Brussels on 16 December 2026.
The Hindu, 24 Sep 2026: India-EU FTA to be signed on December 16 (opens in a new tab) · The Hindu, 21 Sep 2026: India-New Zealand FTA ratified, to come into effect on October 20 (opens in a new tab) · News On AIR, 21 Sep 2026: India–New Zealand FTA comes into force on 20 October (opens in a new tab)
12 Aug 2026Briefnewly addedIndia signed terms of reference with the Southern African Customs Union for preferential trade agreement talks, and on 26 August took forward talks with Chile on a Comprehensive Economic Partnership Agreement. BusinessDay, 12 Aug 2026: India and SACU revive talks on preferential trade agreement (opens in a new tab) · Southern African Customs Union, 13 Aug 2026: Press release: SACU and India sign Terms of Reference (opens in a new tab) · India Briefing, 26 Aug 2026: India FTA tracker 2026 (opens in a new tab)
15 Jul 2026LeadIndia's new trade agreements: the pact with the United Kingdom comes into force

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