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Customs & Duties

India is a significant source of UK imports — particularly clothing, textiles, leather goods, handicrafts, and engineering products. The duty position is changing fast: India's access to the UK's preference scheme has narrowed sharply for textiles, but the new UK-India trade agreement enters into force on 15 July 2026 and takes most clothing and textile duties to zero. Here's where things stand and what it means in practice.

The DCTS: India's Route to Lower UK Duty Rates

The UK's Developing Countries Trading Scheme (DCTS) is the successor to the old GSP arrangements — the UK ran its own version of the EU's Generalised Scheme of Preferences from January 2021, then replaced it with the DCTS in June 2023. India sits in the scheme's Standard Preferences tier. That is the entry-level tier, not the top one: Enhanced Preferences (for economically vulnerable countries such as Pakistan) and Comprehensive Preferences (for least developed countries such as Bangladesh) both cut deeper.

There is a catch, and for textile importers it is a big one. Under the DCTS goods graduation rules, India's exports of woven fabric, woven apparel and made-up textiles (HS chapters 50–58, 62 and 63) — along with several other sectors, including leather goods, chemicals, jewellery, and iron and steel — have their preferences suspended from 1 January 2026 to 31 December 2028 — those goods pay the full UK Global Tariff, which is 12% for most garments. Knitted apparel (chapter 61) keeps its Standard-tier rate of 9.6%.

Understanding how preferential rates and trade agreements work is essential for accurate cost planning when importing from preferential-access countries like India.

Key Duty Rates for Indian Imports Under DCTS

• Woven clothing and made-up textiles: 12% full UKGT — the DCTS preference is suspended by graduation until the end of 2028. Falls to 0% for qualifying goods under the UK-India agreement from 15 July 2026
• Knitted clothing (t-shirts, knitwear): 9.6% under DCTS Standard Preferences — also 0% under the new agreement from 15 July 2026
• Leather goods (handbags, travel goods): 2% full UKGT — chapter 42 is also graduated out of DCTS until the end of 2028, though the rate was low to begin with. 0% under the new agreement from 15 July 2026
• Handicrafts and ceramics: 0–4% depending on product classification
• Engineering goods and machinery: typically 0% under both DCTS and standard UKGT

These are approximate figures — the exact rate depends on the specific 10-digit commodity code. Always verify using the UK Trade Tariff tool, checking which preference (if any) currently applies to Indian origin. Assume a preference that has been graduated away and you understate your landed cost by 12 percentage points on every woven garment.

The Rules of Origin Requirement

To claim the DCTS preferential rate, the goods must originate in India — they must be wholly obtained in India or sufficiently processed there. For textiles and clothing, cutting and sewing a garment in India counts as single transformation; the stricter "double transformation" rule requires the fabric itself to have been woven or knitted in India too. Which rule applies depends on the product-specific rules for your commodity code.

Goods that are merely assembled in India from components imported from a third country, or that transit through India without significant processing, do not qualify. Your Indian supplier should be able to provide a certificate or declaration of origin confirming eligibility. Without this documentation, HMRC can apply the standard UKGT rate on examination.

A Worked Example

A UK fashion brand imports £600 of block-print cotton textiles from a manufacturer in Jaipur, with £45 shipping and £10 insurance.

Block-print cotton is a woven textile, so it falls squarely within the graduated chapters: until the end of 2028, DCTS gives this shipment nothing, and the duty is the same 12% you would pay on the equivalent order from China. The change worth planning for is the UK-India agreement — from 15 July 2026, qualifying goods like these enter at 0%, taking the £79 of duty (and the VAT charged on top of it) out of every order of this size.

The UK-India Trade Agreement: 0% From 15 July 2026

The negotiations that began in January 2022 produced a deal. The UK-India Comprehensive Economic and Trade Agreement (CETA) was concluded in May 2025, signed on 24 July 2025, and enters into force on 15 July 2026. For clothing and textile importers it changes everything: the agreement eliminates tariffs on clothing and textiles, so qualifying Indian garments enter the UK at 0% from that date — woven and knitted alike.

If you are placing orders now, check whether the goods will arrive before or after 15 July. A container landing two weeks later could carry no duty at all, which is worth a conversation with your freight forwarder about timing. And ask your supplier what proof of origin CETA requires — preference under the agreement is claimed with origin documentation, not assumed, and the rules of origin are the agreement's own, not the DCTS ones.

Before You Place Your Next Order

Check the current rate for your specific commodity code — not just the general product category. Woven textiles pay the full 12% until CETA takes over on 15 July 2026; knitted apparel stays at 9.6% under DCTS until then. Ask your Indian supplier for documentation confirming the goods' Indian origin. Calculate the full landed cost — duty, import VAT, freight, and handling — before you set your retail price. Getting your commodity code right is the foundation of an accurate landed cost calculation.