What the India-UK trade agreement means for UK importers

What changed for UK importers when the UK-India agreement came into force?

The UK-India Comprehensive Economic and Trade Agreement (CETA) entered into force on 15 July 2026, and goods that arrive in the UK, or are released from customs control there, on or after that date can enter at 0% customs duty on most Indian tariff lines, provided they qualify and preference is claimed. The UK side has no phased cuts: each line is either duty-free from entry into force or excluded. The one exception is hybrid, electric and other alternatively powered cars (8703 40 to 8703 90), which get a 0% tariff quota only from 1 January 2031 and pay the full UK rate until then.

The preferences take effect in UK law through SI 2026/36, which brings in the India Preferential Tariff and the India Origin Reference Document. The government says 99% of Indian goods will either be duty-free or see reduced tariffs, which does not mean every product is duty-free: milled rice and sugar are among the excluded lines.

Three points matter more than the headline rate:

• Preference is not automatic. It must be claimed on each import declaration and backed by a valid proof of origin.
• It changes customs duty only. Import VAT, plant-health rules and food-safety standards apply as before.
• As of October 2026, India also stays in the UK's Developing Countries Trading Scheme (DCTS) until 14 July 2028, but DCTS and CETA proofs of origin are not interchangeable.

How do you claim CETA preference on a UK import declaration?

Preference is claimed by the importer of record, on the import declaration lodged on HMRC's Customs Declaration Service (CDS). Three data elements carry the claim:

1. DE 4/17: preference code 300 (tariff preference without conditions or limits). DCTS claims use the 200 series instead.
2. DE 5/16: IN as the country of preferential origin, as shown on the proof. DE 5/15 (country of origin) must also be completed.
3. DE 2/3: the proof of origin with its document status code. Use 9001 for an origin declaration (enter the invoice number), N954 for a certificate of origin (enter its reference number) or U112 for importer's knowledge.

HMRC's Tariff Stop Press lists only status code JP for U112, while the CDS appendix lists AE, AP, JE and JP, so confirm the code with your customs broker. A consignment with a customs value of £1,000 or less needs no proof of origin, provided the goods are still declared as meeting the rules, HMRC has no reasonable doubt, and the shipment was not split to stay under the limit.

Who the importer of record is depends on your terms. Under DDP a UK partner company is importer of record and makes the claim; under DAP the buyer is importer of record and a UK-established partner lodges the entry as its representative. The liability behind each choice is explained in choosing DAP or DDP for India to UK shipments. Britbasket is registered in India and is not UK-established, so it never lodges UK declarations itself.

Which proof of origin should you use, and who makes it?

For imports into the UK, CETA accepts three proofs of origin: an origin declaration completed by the Indian exporter or producer, a certificate of origin issued by an Indian issuing authority, or the importer's knowledge backed by documents.

If you are used to the phrase statement on origin, the CETA term is origin declaration. It must be in English, follow the Annex 3B structure and travel with an invoice or other commercial document identifying the goods. An origin declaration is valid for 12 months from completion, and a certificate of origin for 12 months from issue.

Indian exporters need no REX or approved-exporter status and do not register with HMRC. The registration and URN authentication process applies only to UK exports to India. Under DGFT Trade Notice No. 11/2026-2027, India's own procedure has UK-bound origin documents generated on the Trade Connect platform, with self-declared documents signed using a digital signature certificate linked to the exporter's IEC.

Importer's knowledge is not a shortcut. Declaring U112 is a legal declaration that the goods qualify, and HMRC verifies it with the importer alone, so the importer must hold the commodity code, production and materials data, the origin criterion, and value or weight figures. Where a producer will not share that, HMRC advises an origin declaration instead.

Some consignments ship on Britbasket's own registrations and others on the producer's, where the manufacturer is exporter of record. Either way, agree which proof will be used, and who signs it, before shipment.

How do Indian goods qualify under the CETA rules of origin?

A product qualifies as Indian under CETA if it is wholly obtained in India, made there only from originating materials, or made from non-originating materials that meet the product-specific rule in Annex 3A. Final production must happen in India, and only Indian or UK materials count towards origin.

Fresh fruit and rice must be wholly obtained, meaning grown and harvested in India. Carpets, bed linen and apparel (Chapters 57, 61, 62 and 63) need a change of tariff heading plus the Standard QVC: at least 40% of the ex-works price or 45% of the FOB value by build-down, or at least 35% of either by build-up. There is no double-transformation rule, so goods made in India from imported fabric can qualify if the producer's costings meet the QVC.

Cumulation is bilateral only, so EU, Chinese and other third-country materials always count as non-originating, unless they are first made in India or the UK into an intermediate material that itself meets the rules (Article 3.6). Some operations never confer origin on their own, including:

• repacking, simple packing and labelling
• washing, sorting, grading and preservation
• husking or polishing rice, and peeling or stoning fruit
• simple mixing and simple assembly

Goods bought in China and shipped onward from India therefore do not become Indian through repacking or labelling there, and must not be claimed under CETA.

A tolerance of 7.5% or 12.5% non-originating material, depending on the chapter, applies where a product would otherwise fail a change-of-classification or wholly-obtained rule. It does not help with a QVC calculation.

CETA does not require direct shipment. Goods may transit or be stored in a third country if they stay under customs control and undergo only operations such as unloading, reloading, splitting, storage, labelling or preservation. On request, the importer must prove this to HMRC with transport documents or evidence of customs control.

What does CETA change on duty for common Indian product groups?

Under CETA the rate is 0% for every group below except milled rice, but the saving depends on the standard third-country (MFN) rate paid before. Mangoes and black tea were already duty-free, while most apparel and cotton bed linen fall from 12%.

Classification decides both the rate and the origin rule. Heading 2001 covers only goods preserved in vinegar or acetic acid; pickles in oil and many snacks may fall in 2005, 2008, 1904 or 2106, all still 0% under CETA. Headings 2005 and 2008 share the Chapter 20 rule (change of heading plus Standard QVC), while 1904 and 2106 have different origin rules. Confirm codes with your broker and on the UK Integrated Online Tariff.

Milled rice can still enter at 0% under licensed non-preferential quotas, including one for India only, but these need an AGRIM import licence. For fresh mango, CETA changes nothing on duty; the rest of the route is covered in how to import mangoes from India to the UK.

What does the trade agreement not change?

CETA cuts customs duty on qualifying goods and nothing else. Import VAT, plant-health and food-safety controls apply as before, and Northern Ireland follows its own rules.

Import VAT is normally charged at the same rate as on a UK supply of the same goods. Because duty forms part of the value on which import VAT is calculated, removing it trims the VAT base slightly, but the rate and the liability are unchanged.

The agreement keeps the UK's right to set import conditions, require official certificates and carry out import checks, so Indian produce must still meet UK biosecurity and food-safety standards. An origin declaration never replaces a plant-health document. The phytosanitary certificate guide covers which produce needs one in Great Britain and the role of India's NPPO, which issues it.

In Northern Ireland, CETA preference applies only to goods declared not at risk of moving into the EU. Goods are automatically at risk, and pay the EU rate, when that rate is 3 or more percentage points above the UK duty. With EU third-country rates such as 12% on apparel, Northern Ireland importers may owe EU duty. Great Britain is not affected.

Which records should you keep, and how does HMRC check claims?

Keep the declaration, the proof of origin and the supporting records for at least four years from importation, the CETA minimum, and plan for longer. HMRC can verify a claim at any time, normally has three years to notify underpaid duty, extended to 20 years for entries made on or after 1 January 2021 where an HMRC officer considers an offence has been committed.

Verification starts with a written request to the importer. HMRC can then ask India's Department of Commerce within two years of the claim, or later under the 2021 UK-India customs mutual assistance agreement. Two denials for the same exporter and commodity code can lead to a temporary suspension of preference.

Under the agreement's rules, a claim can fail because of:

• a proof more than 12 months old at import
• a document not on the Annex 3B or 3C format, or one that does not match the invoice
• imported materials that fail the change-of-heading or QVC test
• only minimal operations carried out in India
• transit through a hub with no evidence of customs control

An importer who has reason to believe a claim rests on incorrect information must immediately correct it, tell HMRC and pay any duty and penalties owed. The agreement encourages HMRC to treat a disclosure made before HMRC finds the error as a significant mitigating factor when deciding any penalty. The route is a voluntary disclosure through HMRC's online "Apply for a voluntary clearance amendment (underpayment)" service, after which HMRC raises a C18 charge. Import VAT accounted for under postponed VAT accounting is corrected on the VAT Return instead. Import VAT records must be kept for at least six years.

Indian exporters and producers must keep their own origin records for five years. How the India-side documents are split between Britbasket, producers and our UK partners is set out on our export and compliance services page.

Questions buyers ask

Sources

1. GOV.UK: Historic UK-India Free Trade Agreement is now in effect (17 July 2026)
2. The Customs (Tariff and Miscellaneous Amendments) Regulations 2026 (SI 2026/36)
3. UK-India CETA, Chapter 3: Rules of origin
4. UK-India CETA, Annex 3A: Product-specific rules of origin
5. UK-India CETA, Annex 3B: Origin declaration template
6. HMRC Tariff Stop Press: India Free Trade Agreement enters into force on 15 July 2026 (13 July 2026)
7. HMRC: Preference codes for Data Element 4/17 of the Customs Declaration Service
8. HMRC: Pay less Customs Duty on goods from a country with a UK trade agreement
9. HMRC: Customs debt liability
10. FCDO and DBT: Country graduation from the Developing Countries Trading Scheme, India
11. UK Integrated Online Tariff: milled rice 1006 30 27 12, origin India
12. HMRC: Make sure the correct duty is applied to goods you bring into Northern Ireland

Last reviewed 6 October 2026. Border, tariff and plant-health rules change. Check the sources above before relying on this guide for a specific consignment.