UK–India trade agreement slashes beauty tariffs but logistics stall price cuts

The UK and India have officially entered their free trade agreement (FTA). Under the deal, tariffs on beauty and personal care products, which previously reached up to 22%, will either be eliminated immediately or over a period of up to 10 years. 

The terms of the FTA include that 99% of Indian goods entering the UK and 90% of UK goods entering India will be duty-free or subject to reduced tariffs.

For Indian beauty companies, the FTA is expected to provide unprecedented access to the UK market. Indian products that previously faced import duties can now enter the UK duty-free, making them more competitive against goods imported from the rest of Europe, China, and other countries.

UK cosmetic businesses get to enjoy the same benefits, as the FTA reduces import barriers to India’s expanding beauty market.

“This is a watershed moment for the UK–India partnership. “Our landmark trade deal is designed to benefit businesses and consumers from day one with cheaper, quicker, and easier trade,” says Harjinder Kang, His Majesty’s trade commissioner for South Asia and the British deputy high commissioner for Western India.

According to the UK government, the FTA al is expected to boost annual bilateral trade by £25.5 billion (US$34.3 billion). Moreover, in the long run, India’s gross domestic product (GDP) is expected to rise by £5.1 billion (US$6.9 billion) and the UK’s GDP by £4.8 billion (US$6.5 billion).

To celebrate the agreement coming into force, a package of British products that will now benefit from the reduced tariffs arrived in Mumbai on a British Airways flight. The package included cosmetics from companies such as Lush, The Body Shop, Rodial, Collection Cosmetics, and Makeup Revolution.

Beauty brands are set to benefit from lower barriers to India’s expanding personal care market.“The UK–India FTA marks a significant milestone in the relationship between the UK and India and reinforces the long-term potential of one of the world’s most dynamic international corridors,” says David Wright, British Airways’ general manager in India.

Beauty responds

British cosmetics brands are already responding to the adjusted trade environment. Lush has reportedly paused a price increase it had scheduled for India due to currency depreciation. 

The Indian rupee has weakened by about 12% compared to the British pound in the past year, which increases the cost of importing goods from the UK. 

Lush only recently returned to India after almost two decades. The British cosmetic brand exited the country in the early 2000s and made its comeback in November last year, chasing India’s luxury beauty boom. 

At the time, Lush said it would import the majority of its Indian offerings from the UK, only locally producing a portion of fresh items, such as face masks. The FTA now grants the brand room to adjust its pricing strategy.

According to Vishal Anand, founder and CEO of Bilberry Brands, Lush’s exclusive partner in India, the company will reportedly reduce prices in categories where the tariff reductions are most significant, particularly shower gels and soaps.

However, Anand notes that it isn’t feasible for the company to introduce price reductions across every product line, as the weaker rupee still outweighs the savings from the lower import duties.

Shelf-price pivot?

For Indian consumers, the FTA will grant wider access to premium British beauty brands and could potentially make pricing more competitive over time. However, the full benefits likely won’t appear overnight.

Global shipping disruptions due to conflict in West Asia have pushed many importers to switch from sea freight to air cargo, which has significantly raised logistics costs.

Reduced tariffs could help UK beauty brands compete in India, but currency and logistics pressures may limit immediate price cuts.As a result, the agreement would likely cushion consumers from further price increases rather than trigger immediate discounts across product categories, especially as the tariff reductions will phase in gradually. 

India’s cosmetics boom

The beauty industry has been focusing on India in the past few years, as the country’s personal care market undergoes rapid expansion. It recently surpassed a US$30 billion valuation, fueled by rising incomes, urbanization, and the boom of e-commerce and quick commerce.

“The global beauty industry is increasingly looking toward India not merely as a consumer market but as a strategic hub for innovation, manufacturing, and product development,” Ceyril Perira, managing director at Triune Exhibitors Private Limited (TEPL), said at Cosmetica 2026 last month.

According to TEPL, premium skin care, color cosmetics, men’s grooming, and natural Ayurvedic products are among the key categories fueling the country’s cosmetics surge.

Kindlife, an Indian e-commerce platform, is reportedly currently working with 12 British brands operating across skin care, body care, and wellness that aim to launch in India over the next few months.

Radhika Ghai, the company’s founder and CEO, says the conversation with UK companies has shifted. “The question from brands has changed,” she says. “It used to be, ‘Should we enter India?’ Now it is, ‘How do we scale in India the right way?’”

Across the board, big brands entering India have increasingly done so through e-commerce partnerships. Most recently, UK makeup brand Charlotte Tilbury expanded its exclusive partnership with Nykaa’s online platform and opened its first exclusive boutique in New Delhi in April.