India Import Market Update: Trade Deal, Tariffs and Capacity Constraints
With the new UK–India Free Trade Agreement due to take effect on 15 July, attention is increasingly turning to India–UK imports amid challenging market conditions.
The UK Government has said tariffs will be removed on 99% of Indian goods, improving access for products such as apparel, textiles, and other key imports. However, preferential tariff treatment will not apply automatically simply because goods are shipped from India. Products must comply with the agreement’s rules of origin, which determine whether they qualify as being produced in India.
Some domestically sensitive sectors will not benefit from the deal, including sugar, milled rice, pork, chicken and eggs. The greatest impact on UK imports is expected to be seen across consumer goods, including textiles, clothing, footwear, jewellery and furniture.
While the new trade deal is a positive development for the market, it is being introduced at a difficult time. Peak season demand is currently coinciding with capacity constraints, making westbound bookings increasingly difficult to secure. Many carriers are now fully booked four to six weeks in advance.
As seen across other Asian markets, freight rates are rising and peak season surcharges are being applied. Further carrier increases have also been announced from 15 July. Service reliability remains inconsistent and varies significantly by carrier, with some service loops recording below 30% on-time arrivals.
Port congestion is also building. Vessel waiting times at Kochi and Mangalore are approaching two weeks, while Mumbai, Nhava Sheva, Tuticorin, Kolkata and Mundra are experiencing delays of around two to three days.
As the new trade deal brings greater focus to origin rules, commodity codes and supporting documentation, effective customs brokerage and compliance will be essential for importers seeking to take advantage of any available tariff benefits.
Killick Martin is supporting customers across both Indian import services and Customs Brokerage, helping ensure shipments are correctly declared, compliant and managed smoothly from door to door. Please contact a member of the team to discuss how we can help.
