New Delhi: In the first year of the newly signed Free Trade Agreement, India could lose around ₹4,060 crore in customs revenue, according to the Global Trade Research Initiative. The amount reflects the customs duties India will not collect due to lower or remove tariffs on many British goods entering the country. The estimate of India's loss is based on current import volumes and tariff structures. The deal was signed last week and involves phased tariff elimination, which will increase India's annual revenue loss to ₹6,345 crore by the tenth year of implementation. This is equivalent to around 574 million British pounds, calculated using trade data for the financial year 2025.

Based on these factors, India's revenue foregone in the first year of the agreement is estimated at ₹4,060 crore, GTRI founder Ajay Srivastava was quoted as saying to news agency PTI. India is set to import goods worth $8.6 billion from the UK in 2024–25. Industrial products hold a large share of this, attracting an average customs duty of 9.2%. GTRI said India has agreed to eliminate tariffs on 64% of the value of imports from the UK as soon as the agreement is implemented.

In total, India is going to remove 85% of its tariff lines and reduce duties on another 5% of product categories. However, most agricultural goods have been excluded from the cuts—except items like whiskey and gin, which currently face much higher average tariffs of 64.3%. In turn, the UK imported $14.5 billion worth of Indian goods in the last fiscal year. This translates to an estimated annual revenue of 375 million British pounds (₹3,884 crore) for the UK, based again on FY 2025 trade data. As India expands its exports to the UK, the fiscal impact is likely to grow over time, GTRI noted.

Under the Comprehensive Economic and Trade Agreement, the UK has committed to removing tariffs on 99% of Indian imports. The agreement still requires parliamentary approval in the UK, and full implementation may take up to a year.