MUMBAI: For local consumers, the India-UK Comprehensive Economic and Trade Agreement (CETA) means more choices on retail shelves as new British brands are expected to enter the market. In fact, initial queries and conversations have already started.But the deal may not immediately translate into steep price cuts for shoppers across the board-the depreciation of rupee against the pound has made imports costlier, making it challenging for brands to pass on the entire benefit of duty cuts to consumers, industry executives said. Consumers, though, will be offered some cushion against broader price hikes stemming from rupee depreciation and war-led input cost volatility.British cosmetics brand Lush, for instance, has paused a planned price hike (due to currency depreciation) in India after the pact took effect and will be reducing prices in categories where the duty benefits are most significant such as shower gels and soaps, said Vishal Anand, founder & CEO at Bilberry Brands which is the exclusive partner for Lush in India.
However, price reductions for all products will not be feasible, particularly in cases where the impact of currency devaluation outweighs the gains from duty cuts, Anand indicated without sharing details. “Over the longer term, as import duties are phased down further under the FTA, consumers can expect to benefit from more competitive pricing across a wider range of products,” said Anand. The rupee has depreciated around 12% against the pound over the past year.Besides, the West Asia war disrupted logistics and prolonged shipment delivery timelines, pushing companies to shift to air routes from sea, driving up costs. “The tariff cuts free up margins but rupee volatility and global supply chain costs mean nobody should expect MRPs to fall overnight,” said Radhika Ghai, founder & CEO at Kindlife, a local online marketplace which launches and distributes global beauty brands.Kindlife is currently working with 12 UK brands spanning clinical skincare, targeted body care and wellness, all gearing up to launch in India over the next two to three quarters, said Ghai, adding that most brands are chasing the sweet price spot of around Rs 700-1,500. “The question from brands has changed. It used to be-should we enter India? And now it is how do we scale here the right way?,” said Ghai.Many British watch-making brands will now be interested in coming to India, said Pranav Saboo, MD & CEO at Ethos which runs a chain of luxury watch boutiques. “For smaller brands, the FTA will allow conversations (around launching in India) to take place,” Saboo said. Sanskriti Gupta, spokesperson at bakery and dessert QSR chain Ben’s Cookies India said that it is targeting the launch of 8-10 stores this financial year.
