With the August 1, 2025, deadline, US President Donald Trump announced the latest reciprocal tariff rates for trading partners. With India, the US has remained firm on its 25% tariff on India.
There had also been reports of the White House imposing “additional penalties” on India for purchasing crude oil and military equipment from Russia; however, no clarity on that has been given so far. The new tariffs will stay in place, unless and until the two countries enter into a trade deal that could affect the rates.
This has led to a lot of frenzy, with market analysts and experts wondering how this could impact the Indian economy and how much heavier it could be on the Indian consumer.
In the same vein, India also entered into a trade deal with the United Kingdom (UK), and that could lead to its own changes.
How Will UK Tariffs Impact India?
On July 24, 2025, Indian Prime Minister Narendra Modi and UK Prime Minister Keir Starmer went ahead with the Free Trade Agreement, the latter’s first major post-Brexit agreement.
Commerce Minister Piyush Goyal and UK Business Secretary Jonathan Reynolds, representing the two countries, signed the landmark agreement that is estimated to increase bilateral trade by nearly $34 billion annually.
In the trade deal, tariffs on UK imports into India were cut by significant margins. Reportedly, the average import duty on UK goods would be cut from its earlier 15% to just 3%.
Here is what could potentially become more expensive and/or cheaper for Indians post this deal.
Cheaper
Tariffs on UK-made automobiles, including electric vehicles, that were previously over 100%, will be slashed to 10% under a quota system, according to an Indian Express report.
This means premium brands like Rolls-Royce, Jaguar Land Rover, Bentley, and Aston Martin could see reduced prices in the Indian market.
Importing medical equipment and aerospace components from the UK could also be cheaper for Indian consumers and industries. Several other items will also see a reduction in tariffs to zero over the coming years, including:
- In ten years, duty on silver will come down to zero
- Lenses and microscopes will see a reduction of import duty from 11% to zero
- The 10% rate applicable to soaps, perfumes, and nail polish is to be reduced to zero
- Medical and medtech devices that were tariffed at 13.75% will be slashed to zero
Read More: Will Trump’s Tariffs Crush India?
UK imported goods like chocolates, biscuits, soft drinks, beauty products, lamb, fish, and salmon will become cheaper for Indian consumers.
The biggest reduction in tariffs was seen for whisky, which saw a reduction in import duties from 150% to 75%, and further to 40% over the next decade. Other imported alcoholic beverages will also see a lowering of their tariffs.
While there is no direct increase in prices for Indian consumers due to this deal, reports have revealed that products belonging to sectors not included in the agreement could maintain their current price range or even see an increase.
How Will US Tariffs Impact India?
Negotiations are said to take place between the two countries around mid-August, with reports believing that the rate could potentially be reduced; however, until then, export-linked sectors could remain in a volatile condition.
The new tariff rates have already caused much mayhem in the Indian financial sector.
However, these rates won’t affect Indian consumers as such, since these rates are applicable only on Indian goods exported to the US. Which means that Indian products sold in the US will become 25% more expensive from Friday.
As of now, reports have not specified if anything will get cheaper if these tariff rates remain in place. There is speculation that these high rates could be some kind of bargaining move by the US to make India reduce its own tariffs on US goods, something that the White House has complained about being too high.
In a social media post, Trump wrote, “India is our friend,” adding, “but we have done relatively little business with them because their tariffs are far too high… and they have the most strenuous and obnoxious non‑monetary trade barriers of any country.”
Image Credits: Google Images
Sources: Financial Express, Mint, Hindustan Times
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