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Customs & Duties

India is a significant source of UK imports — particularly clothing, textiles, leather goods, handicrafts, and engineering products. If you import from India, you have access to a preferential duty scheme that can meaningfully reduce your costs compared to standard UK Global Tariff rates. Here's how it works and what it means in practice.

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

The UK's Developing Countries Trading Scheme (DCTS) replaced the EU's Generalised Scheme of Preferences (GSP) after Brexit. India falls within the scheme's Enhanced Preferences tier — the highest category, which provides the most significant duty reductions available to any non-FTA country.

Under Enhanced Preferences, many goods imported from India attract duty rates that are substantially lower than the standard UKGT rates that apply to imports from the USA, China, or other countries without preferential access. This is a meaningful competitive advantage for businesses sourcing from India.

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

• Clothing and apparel: typically 9.6% under DCTS Enhanced Preferences, compared to 12% under the standard UKGT
• Woven textiles and fabrics: typically 8% under DCTS, compared to 10–12% standard
• Leather goods (handbags, footwear uppers): 2.7–3.7% under DCTS
• 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 with the DCTS preference selected, not the standard UKGT rate. Using the wrong rate underestimates your landed cost by a meaningful margin for high-volume textile imports.

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, "sufficiently processed" typically means the fabric was both cut and sewn in India (the "double transformation" rule).

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.

At the standard UKGT rate of 12%, the duty on the same order would have been £79 — a difference of £16. Across a year of regular orders, those savings compound. At £600 per order and 20 orders per year, DCTS saves over £300 in duty alone.

What About a UK-India Free Trade Agreement?

A UK-India free trade agreement has been under negotiation since January 2022. Progress has been intermittent — negotiations have stalled and restarted several times. If concluded, it would likely reduce duty rates on Indian goods further, potentially to zero for many categories. However, given the complexity of the negotiation and the number of outstanding issues, no deal should be assumed or priced in. Plan on current DCTS rates and treat any FTA as a future upside.

Before You Place Your Next Order

Confirm that the DCTS Enhanced Preferences rate applies to your specific commodity code — not just the general product category. 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.