Wednesday marked the start of two significant changes for UK shoppers and businesses: a free trade agreement with India that slashes tariffs on everything from Scotch whisky to Wimbledon towels, and new rules that bring buy now, pay later credit under the watch of the City regulator.
The India-UK free trade agreement – described by the British government as “the UK’s biggest and most economically significant bilateral trade pact” since leaving the EU – removes or reduces tariffs on 99% of Indian exports to the UK and 90% of UK imports into India. The pact, formally signed in July 2026 after negotiations began in 2022, is expected to boost UK GDP by 0.13% (£4.8bn) and India’s by 0.06% (£5.1bn) a year in the long run.
“India-UK trade deal and new buy now, pay later protections both take effect on Wednesday.”
For Indian textile giant Welspun Living, which makes championship towels for Wimbledon and supplies John Lewis and Tesco, the deal is already reshaping business. “Many of these brands have been in India in recent weeks to chart a business roadmap for the next few years,” said CEO Dipali Goenka. “In fact, as we speak, our supply chain team in London is sitting in the John Lewis office.” She expects exports to the UK to “grow in double digits”, finally closing a tariff gap that left India paying 12% while rivals Bangladesh and Pakistan entered duty-free under the Developing Countries Trading Scheme. “Pakistan’s share of UK exports [in home textiles] is around 55%, whereas India’s is just 6-7%,” Goenka said.
The whisky trade is also set for a shake-up. Customs duties on Scotch whisky fall immediately from 150% to 75%, with a further reduction to 40% over 10 years. Avneet Singh of Modern Drinks Pvt Ltd, a Delhi-based importer, called it a “real shift, not a small tweak”. He said the focus now is on operational readiness – working with UK suppliers on certificates of origin and customs compliance – and will watch for momentum in the coming months.
On the same day, millions of UK shoppers gained new protections as buy now, pay later (BNPL) credit became regulated by the Financial Conduct Authority. The government said it was delivering on its commitment to end the BNPL “wild west”, and the Treasury promised a “fairer deal”. Lenders including Klarna, Clearpay and PayPal – which dominate a sector that surged from £60m in 2017 to more than £13bn in 2024 – must now carry out affordability checks before offering loans. If borrowers miss payments, they face late fees and potential marks on their credit file; if they pay on time, the credit remains interest-free.
The FCA’s figures show 25% of UK adults used BNPL in the past year, up from 14% – with the biggest recent growth among older consumers. Citizens Advice has reported helping “more people than ever before” with BNPL-related problems. Despite the new safeguards, campaigners caution shoppers to think carefully before clicking the BNPL button.