India's ₹1,71,860 crore (US$ 20 billion) cosmetics and beauty market is on the brink of a transformative shift, thanks to the India-UK Free Trade Agreement (FTA). This deal, expected to significantly reduce duties on cosmetics, perfumes, essential oils, and toiletries, will make beauty imports from the UK more affordable and accessible for Indian consumers.

Boost to India's Growing Beauty Market

India’s beauty industry is currently one of the fastest-growing segments, with a substantial customer base of over 700 million young consumers. The FTA is expected to bring a major boost to this booming industry, allowing Indian consumers to access high-end global brands at competitive prices.

In 2024 alone, India imported ₹296 crore (US$ 34.4 million) worth of cosmetics and toiletries from the UK. With the new tariff structure, this number is expected to rise sharply in the coming years.

Global Beauty Brands Eye Indian Expansion

With the reduced duties, large UK-based companies such as The Body Shop are preparing to ramp up imports into the Indian market. The Body Shop, which already has a strong presence in India, plans to introduce more products and expand its market share.

Other international players expected to leverage this opportunity include:

• Clinique and MAC Cosmetics (part of Estée Lauder Companies)

• LVMH (owning Dior and Tiffany & Co.), expected to route more products through their British arms

• Kiehl’s, Avon, Anastasia Beverly Hills, and other luxury beauty brands

Retail Leaders and E-commerce Giants to Reap Benefits

According to Ms. Shriti Malhotra, Executive Chairperson of Quest Retail (distributor for The Body Shop, Kiehl’s, Avon, and others in India), the FTA will lower import duties, allowing brands to offer better pricing to Indian customers while expanding product portfolios. She also emphasized the benefit to "Made in India" beauty products, which will enjoy a more competitive edge due to relaxed trade regulations.

Retailers expected to gain from this trade liberalization include:

• Nykaa – Already a leader in online beauty retail

• Reliance Retail's Tira – Rapidly expanding footprint, including a new Concierge service with personalised recommendations

• Shoppers Stop – Physical retail expansion and online presence

• Amazon and Myntra – Major e-commerce players that dominate premium beauty sales online

Just last week, Myntra announced the launch of global beauty brands like YSL, Laura Mercier, and TirTir in India—showing signs that the FTA is already driving market shifts.

Young Consumer Demand and Innovation Drive

Ms. Radhika Ghai, Founder and CEO of Kindlife, emphasized how the policy will fuel supply chains to meet the increasing demand among India’s young population. This demographic, comprising more than half the country’s population, is digitally savvy, brand-conscious, and eager to try international trends.

The combination of increased affordability and wider product selection is expected to attract more of India’s Gen Z and millennial buyers toward premium and luxury cosmetics.

Tougher Competition for Domestic Giants

While the FTA benefits importers and consumers, it raises the stakes for domestic beauty giants like:

• Hindustan Unilever Limited (HUL)

• L’Oréal India

• Procter & Gamble (P&G)

These companies, which manufacture locally and sell premium beauty products, may face heightened competition from imported UK brands. However, this may also spur innovation and quality enhancements among domestic players, benefiting the industry overall.

FTA to Spur Industry-Wide Growth and Collaboration

The India-UK FTA is being seen as a catalyst for global collaboration, offering opportunities for joint ventures, brand partnerships, and more robust distribution networks. Many global beauty companies are expected to set up logistics hubs, innovation centers, and retail chains in India as a result.

The agreement may also encourage UK companies to invest in local manufacturing, especially for products customized for Indian skin tones, weather, and preferences—creating jobs and strengthening the local supply chain.

Conclusion

The India-UK Free Trade Agreement is poised to reshape the landscape of India’s beauty and cosmetics industry. With lower import duties, increased accessibility, and a surge of new global entrants, consumers are in for a wider range of choices and better prices.

At the same time, domestic players will need to innovate, collaborate, and cater to evolving consumer demands to stay competitive. With retailers and e-commerce platforms expanding their beauty offerings, the future of India’s beauty sector looks both exciting and dynamic.

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