What the UK duty changes on Indian and Indonesian imports mean for retail and consumer supply chains

 As of 1 January 2026, the UK has suspended preferential duty rates on certain goods imported from India and Indonesia under the Developing Countries Trading Scheme (DCTS). For retail supply chains importing textiles, apparel, leather goods, and footwear from these countries, this means higher landed costs and a need to reassess sourcing strategies quickly. 

Here’s what’s changing, which categories are affected, and what you can do now. 

What’s happening?

The UK Government has confirmed that specific product chapters originating from India and Indonesia will lose their preferential DCTS duty rates, this is a process known as “goods graduation”. 

What this means in practice: 

• From 1 January 2026, goods in the graduated chapters move from the preferential DCTS rate to the UK Global Tariff rate. 
• The suspension runs until 31 December 2028. 
• For high volume categories like textiles and footwear, even small duty increases can have a significant impact on margin and pricing. 

Which goods are affected?

The UK Government has published the full list of graduated chapters. Below, we’ve highlighted the retail and consumer categories most likely to be affected. 

Goods from India (graduated 1 Jan 2026 – 31 Dec 2028) 

Key retail categories: 

• Textiles and apparel – HS chapters 50–58, 62–63 (silk, cotton, man-made fibres, woven apparel, home textiles) 
• Leather goods and travel accessories – HS 42 (handbags, luggage, wallets) 
• Jewellery and precious metals – HS 71 
• Other affected chapters include: 
• Milling products and starches (HS 11) 
• Fats and oils (HS 15) 
• Inorganic and organic chemicals (HS 28, 29) 
• Carpets and floor coverings (HS 57) 
• Stone, plaster, and cement articles (HS 68) 
• Iron and steel articles (HS 73) 

Goods from Indonesia (graduated 1 Jan 2026 – 31 Dec 2028) 

Key retail categories: 

• Footwear – HS 64 
• Home and lifestyle – HS 46 (basketware, wickerwork, plaiting materials) 
• Other affected chapters: 
• Fats and oils (HS 15) 
• Musical instruments (HS 92) 

Why this matters for retail supply chains

Many retail importers rely on DCTS Standard Preferences to keep landed costs competitive. With the current graduation, landed costs may increase on affected products, putting pressure on margin, pricing, and promotional plans. Range planning and sourcing strategies may need revisiting, especially if you source multiple SKUs from India or Indonesia across these categories. Customs compliance also becomes more important—correct commodity classification and robust origin evidence are critical when preferential rates are no longer available.

What you can do now 

• Identify which SKUs you import from India and Indonesia, confirm the HS codes and country of origin, and flag any products in the graduated chapters. 
• Quantify the likely impact by product line, season, and supplier so you can plan ahead.
• Make sure your supplier origin statements and supporting documentation are accurate, especially in cases where multi-country processing could affect origin determination.
• Depending on your category and volume, you may need to look at alternative sourcing, routing changes, or customs procedures to manage duty exposure.

How Ligentia can help

Duty preference changes can affect cost to serve, availability, customer promise, and working capital. Ligentia supports retail and consumer supply chains with: 

• End-to-end visibility across purchase orders, origin, and customs data 

• HS code and origin governance support with exception handling 

• Landed-cost scenario modelling to inform sourcing and inventory decisions 

• Operational execution across air, ocean, and road, helping you stay resilient when trade rules change 

The impact of these changes will vary by business and category. With our expertise in retail and consumer supply chains, we can help you assess your exposure and plan your response. Get in touch with us today.