Shipping from India to the UK: customs duty, VAT and the UK–India trade deal (2026)
Since 15 July 2026 the UK–India trade agreement removes UK customs duty on Indian-made goods such as clothing, shawls, jewellery and incense, if they meet the origin rules and preference is claimed. For most small parcels, though, the bigger issue is VAT: on orders of £135 or less, the seller or the marketplace must charge UK VAT at checkout. Here is how both work, with an official source and date on every rule.
The UK–India trade deal
The UK–India Comprehensive Economic and Trade Agreement (CETA), signed on 24 July 2025, entered into force on 15 July 2026.
Indian-origin goods get 0% UK customs duty under the UK–India agreement (from 15 July 2026) on every sample tariff line we checked, if they meet the origin rules and preference is claimed. Without preference, the UK third-country rates are, for example: cotton T-shirts 12%, women's cotton dresses 12%, silk or wool shawls 8%, agarbatti 6%, silver or gold jewellery 2%.
Orders of £135 or less
For consignments worth £135 or less (goods value, excluding transport if shown separately), the overseas seller must charge UK VAT at the point of sale and register for UK VAT. If the sale goes through an online marketplace, the marketplace does this instead. No import VAT is charged at the border.
B2B sales to a UK VAT-registered customer who gives their VAT number use the reverse charge, so the seller does not charge VAT.
UK customs-duty relief on consignments of £135 or less still applies today. The government will remove it (making these parcels subject to tariffs) by October 2028 at the latest; this was accelerated from March 2029 on 23 June 2026. The reform may add a fiscal-representative requirement and an administration fee.
Because UK duty is not charged on these consignments at the moment, the trade deal makes little difference to most small parcels today. It matters for orders above £135, and it will matter for small parcels once the UK removes the low-value relief.
Orders above £135
Above £135, normal import VAT and customs duty apply at the border, paid by the buyer (DDU) or prepaid by the seller (DDP).
UK standard VAT rate is 20%, with a 5% reduced rate and 0% for e.g. most children's clothes and books.
When the buyer pays on delivery, Royal Mail charges an £8 handling fee and Parcelforce £12 (£25 for goods over £900). Couriers charge their own fees.
Example: one item worth £200.00, sent by courier with the buyer paying on delivery (DDU). Charges are UK duty plus 20% import VAT, before the carrier's own fee. With preference, only VAT is left.
| Product (made in India) | UK code | Normal UK duty | With UK–India preference | Duty + VAT without preference | Duty + VAT with preference | Try it |
|---|---|---|---|---|---|---|
| Women's cotton dress (woven) | 6204420090 | 12% | 0% | £68.80 | £40.00 | Open in calculator |
| Cotton T-shirt (knitted) | 6109100010 | 12% | 0% | £68.80 | £40.00 | Open in calculator |
| Silk scarf or shawl (70%+ silk) | 6214100090 | 8% | 0% | £59.20 | £40.00 | Open in calculator |
| Wool shawl or scarf | 6214200090 | 8% | 0% | £59.20 | £40.00 | Open in calculator |
| Incense sticks (agarbatti) | 3307410000 | 6% | 0% | £54.40 | £40.00 | Open in calculator |
| Silver jewellery (not chain by the metre) | 7113110000 | 2% | 0% | £44.80 | £40.00 | Open in calculator |
| Gold jewellery | 7113190000 | 2% | 0% | £44.80 | £40.00 | Open in calculator |
Codes and rates from the UK Trade Tariff (HMRC / Department for Business and Trade, checked 24 Oct 2026). Duty and VAT are worked out on the item price only, as if shipping were free; the tariff charges them on the value including transport. Your exact product may have a different code: check it in our HS code lookup links.
Claiming the 0% rate: origin rules and proof
Under the UK–India agreement, goods count as originating if they are wholly obtained or produced in the UK or India, made entirely from originating materials, or, where non-originating materials are used, meet the product-specific rule for their tariff line.
A UK importer can claim preference on Indian goods on the basis of a self-certified origin declaration, a certificate of origin from an issuing authority in India, or 'importer's knowledge' backed by sufficient evidence (import declaration document codes 9001, N954 and U112). Incorrect claims can lead to delays, penalties or loss of the preference.
Whoever makes an import declaration with a preference claim must keep the declaration, the proof of origin and supporting documents for at least 4 years. Duty paid without a preference claim can sometimes be reclaimed later if a valid proof of origin is obtained.
In a sale to a UK consumer above £135, the buyer is normally the importer, and the carrier clears the parcel for them. Ask your courier how it claims preference for Indian goods and what origin wording or document it needs on the invoice. If no claim is made, the normal duty applies.
Checklist for selling from India to UK buyers
- Selling through Etsy, Amazon or eBay? The marketplace normally charges UK VAT on orders of £135 or less. Selling on your own website? You need a UK VAT registration to charge it.
- For orders above £135, decide who pays duty and VAT: the buyer on delivery (DDU), or you, built into your price (DDP).
- Check that each product is made in India and meets the product-specific rule, and keep the evidence (supplier invoices, material details) for at least 4 years.
- Put the UK commodity code, a precise description, the value and "Country of origin: India" on the invoice and customs form.
- Ask your carrier which proof of origin it accepts for UK–India preference before you rely on 0% duty.
Also selling to the US? See India to US: customs duty and the 10% Section 301 tariff. Want to compare costs for an order? Use the buyer-cost calculator and tick the free-trade preference box.
This page is general information, not legal, tax or customs advice. The UK guidance on preference describes the general rules; whether your goods qualify depends on the agreement's product-specific rules. See the disclaimer.
Sources for this page
- UK–India Trade Deal (collection), Department for Business and Trade / GOV.UK. Accessed 24 Oct 2026. Verified
- Tariffs and customs for imports from and exports to India, Department for Business and Trade (business.gov.uk). Accessed 24 Oct 2026. Verified
- India Free Trade Agreement (enters into force on 15 July 2026): Tariff stop press, 13 July 2026, HM Revenue & Customs (UK Integrated Online Tariff). Accessed 24 Oct 2026. Verified
- UK Trade Tariff: commodity measures for imports from India (preference measure for India and third-country duty), sample codes on this page, HMRC / Department for Business and Trade. Accessed 24 Oct 2026. Verified
- VAT and overseas goods sold directly to customers in the UK, HMRC / GOV.UK. Accessed 20 Oct 2026. Verified
- Government backs high street with acceleration of cheap import reforms (23 Jun 2026), GOV.UK. Accessed 20 Oct 2026. Partly verified
- Reforming the customs treatment of low value imports into the UK (policy paper, 13 Jul 2026), HM Treasury / HMRC. Accessed 20 Oct 2026. Partly verified
- VAT rates, GOV.UK. Accessed 20 Oct 2026. Verified
- Pay less Customs Duty on goods from a country with a UK trade agreement, HMRC / GOV.UK. Accessed 24 Oct 2026. Verified
- Pay a fee (customs charges), Royal Mail. Accessed 20 Oct 2026. Partly verified
- Pay a customs charge for parcel deliveries, Parcelforce Worldwide. Accessed 20 Oct 2026. Partly verified