India waives customs duty, IGST on imported animals under UK trade pact from July 15

India will waive customs duty and Integrated Goods and Services Tax (IGST) on imported animals (livestock) under tariff concessions agreed in the India-UK Fr...

What Happened

India will waive customs duty and Integrated Goods and Services Tax (IGST) on imported animals (livestock) under tariff concessions agreed in the India-UK Free Trade Agreement (FTA), effective July 15, 2026.
The India-UK FTA was signed on 6 May 2025 after over three years of negotiations; it enters into force on July 15, 2026, after completion of domestic ratification procedures in both countries.
Under the agreement, India will reduce tariffs on 90% of British products; 64% of tariff lines covering approximately £1.9 billion of current UK exports will become duty-free immediately upon entry into force.
Over time, 85% of British products will become fully duty-free in India; India's average tariff on UK goods will fall from approximately 15% to 3%.
The UK will eliminate tariffs on 99% of Indian exports from the date of entry into force, benefiting Indian sectors including textiles, gems and jewellery, marine products, leather, toys, and engineering goods.

Static Topic Bridges

Free Trade Agreements (FTAs): Structure and Legal Framework

A Free Trade Agreement is a treaty between two or more nations to reduce or eliminate barriers to trade in goods and services. FTAs are governed under Article XXIV of the General Agreement on Tariffs and Trade (GATT) within the WTO framework, which permits member countries to form preferential trading arrangements provided they cover "substantially all trade" and do not raise barriers against third-party WTO members. India's FTAs are negotiated by the Department of Commerce under the Ministry of Commerce and Industry and require Parliamentary notification but not ratification for tariff changes, which are implemented through customs notifications issued by the Central Board of Indirect Taxes and Customs (CBIC).

WTO legal basis: Article XXIV of GATT 1994.
India's FTA authority: Department of Commerce (Ministry of Commerce and Industry).
Tariff changes implemented via: CBIC customs notifications under the Customs Act, 1962.
India's existing FTAs: ASEAN, South Korea, Japan, UAE, Australia (ECTA), Mauritius (CECPA), among others.
The India-UK deal is formally titled a Comprehensive Economic and Trade Agreement (CETA).

Connection to this news: The waiver of customs duty and IGST on imported livestock under the India-UK FTA is a direct application of the tariff concession mechanism — implemented by India through a CBIC notification effective July 15, 2026, aligned with the FTA's entry into force date.

Customs Duty and IGST on Imports: Constitutional and Statutory Basis

Customs duty on imports is levied under the Customs Act, 1962, and the Customs Tariff Act, 1975, which classify goods using the Harmonised System of Nomenclature (HSN). Live animals fall under Chapter 1 of the Customs Tariff (HS Code 01). In addition to basic customs duty (BCD), imports attract Integrated GST (IGST) under the Integrated Goods and Services Tax Act, 2017 — a tax equivalent to what would be charged on domestic supply of the same goods. IGST on imports can be claimed as input tax credit by businesses.

Customs Act, 1962: Primary legislation for levy and collection of customs duties.
Customs Tariff Act, 1975: Sets tariff rates using HSN classification.
Live animals: Chapter 1, HS Code 01 (e.g., bovines, swine, poultry, etc.).
Basic customs duty on livestock: Typically 30% (HS Code 01013020 for horses); varies by species.
IGST on live animals: Generally 0% (on the GST side); BCD waivers under FTAs are the significant concession.
IGST on imports: Governed by IGST Act, 2017, Section 3 (read with Customs Act).
Central Board of Indirect Taxes and Customs (CBIC): Under Ministry of Finance; issues customs notifications.

Connection to this news: The waiver of both customs duty (BCD) and IGST on imported animals under the India-UK FTA is implemented through CBIC customs notifications. For livestock (a sensitive sector), any duty waiver also implicates animal quarantine and import licensing requirements from the Department of Animal Husbandry and Dairying (DAHD) and the Directorate General of Foreign Trade (DGFT).

India-UK Bilateral Trade Relations

India and the United Kingdom share deep historical, economic, and institutional ties. The UK is among India's top trading partners in Europe. Bilateral trade in goods and services stood at approximately £42 billion in 2023. FTA negotiations were launched in January 2022 and concluded in May 2025 after 14 rounds, making it one of the most complex trade negotiations India has undertaken. The deal covers goods, services, investment, intellectual property, government procurement, and for the first time in an Indian FTA, commitments on animal welfare and antimicrobial resistance.

FTA negotiations launched: January 2022.
FTA signed: 6 May 2025.
FTA enters into force: 15 July 2026.
UK: India's 14th largest goods trading partner (2023–24 figures).
India's tariff reduction: From average ~15% to ~3% on UK goods (over the deal's lifecycle).
UK's tariff reduction: 99% of Indian exports become duty-free from day one.
India's tariff savings for UK exporters upon entry into force: Estimated at £400 million; projected to reach £900 million over a decade.
Scotch whisky: India's tariff reduced from 150% to 75% immediately, with a quota of 2 million litres at a further reduced rate, declining to 30% over the deal period.
Novel FTA commitments: Animal welfare and antimicrobial resistance standards — first such chapter in an Indian FTA.
A Double Contribution Convention (social security) also enters into force July 15, 2026, alongside the FTA.

Connection to this news: The customs and IGST waiver on imported livestock is one specific tariff concession within the broader India-UK FTA tariff schedule. Livestock imports also intersect with the FTA's animal welfare chapter — India's first such commitment — making this a point of convergence between trade policy and veterinary/sanitary regulation.

Key Facts & Data

India-UK FTA signed: 6 May 2025; enters into force: 15 July 2026.
India to reduce tariffs on 90% of UK tariff lines; 64% duty-free immediately (covering ~£1.9 billion of current UK exports).
UK to eliminate tariffs on 99% of Indian exports from entry into force.
India's average tariff on UK goods: from ~15% to ~3% over the FTA lifecycle.
Scotch whisky tariff: reduced from 150% to 75% (immediate), with quota of 2 million litres; long-term target: 30%.
UK tariff savings for Indian exporters: £400 million upon entry into force; £900 million over a decade.
Key Indian export beneficiaries: Textiles, leather, gems and jewellery, marine products, toys, engineering goods.
FTA negotiations: 14 rounds over approximately 3 years (January 2022 – May 2025).
CBIC: Central Board of Indirect Taxes and Customs — nodal agency for implementing tariff changes.
DGFT license required: Live animal imports remain in the "restricted" category; importers need DGFT approval.
Customs Act, 1962 + Customs Tariff Act, 1975: Statutory basis for customs duty.
IGST Act, 2017 (Section 3): Basis for IGST levy on imports.