India and the United Kingdom, in their Free Trade Agreement (FTA) finalised on Thursday, chose to exclude certain agricultural goods from tariff concessions—most notably dairy products, apples, and cheese. The decision reflects India’s ongoing strategy to protect its smallholder farmers by shielding them from increased competition.
Of the roughly 10 per cent of tariff lines categorised as sensitive, all pertaining to agricultural items, none will receive duty relief under the agreement. The move aligns with India’s approach in other recent trade pacts—including with Australia, and the EFTA bloc—where dairy sectors remained safeguarded.
The exclusions are aimed at protecting India’s smallholder farmers and unorganised dairy sector, which could otherwise be overwhelmed by foreign competition, especially from highly subsidised producers in developed economies.
Currently, Indian tariffs on dairy imports range from 30 per cent to 60 per cent, depending on the product. Apples, which India imports largely from the US and New Zealand, also attract significant duties. The inclusion of British apples, dairy, or cheese could have altered this landscape dramatically.
India’s commerce ministry confirmed that dairy, apples, and cheese—even staples like oats and vegetable oils—were all omitted from duty cuts to protect agrarian livelihoods. Simply put, this means UK exporters of apples and cheeses won’t gain tariff relief in India, maintaining a competitive advantage for domestic producers.
While agriculture remains a protected area, the broader contours of the India-UK FTA are robust. The agreement grants duty-free access to nearly 99 per cent of UK exports to India over a phased timeline. In return, India secured favourable terms for its labour-intensive exports, such as textiles, garments, leather, footwear, gems and jewellery, and engineering goods.
Key service sectors like IT and business consulting are also set to benefit. The agreement is expected to boost mobility for Indian professionals and streamline market access for Indian tech firms—an important win for India’s services-driven economy.
The UK will benefit from reduced tariffs on whisky, automobiles, medical devices, cosmetics, and confectionery, but not in the protected agricultural categories.
With this agreement, India continues to walk a tightrope—liberalising trade in high-potential sectors while preserving domestic sensitivities. The India-UK FTA is expected to elevate bilateral trade to over $100 billion by 2030, but its real test will lie in how both sides implement the deal and navigate future rounds of negotiation.
Source : DAirynews7x7 July 25th 2025 News 18 by Apoorva Misra