India’s thriving cosmetics and beauty market, valued at a staggering Rs. 1,71,860 crore (US$ 20 billion), is on the brink of significant growth, spurred by the recent India-UK free trade agreement (FTA). This agreement is expected to reduce import duties on various beauty products, particularly cosmetics, fragrances, and toiletries, making UK-based beauty brands more affordable to Indian consumers. The reduction in tariffs is anticipated to increase imports of cosmetics and beauty products from the UK, which were valued at Rs. 296 crore (US$ 34.4 million) in 2024, with even more products expected to flow into the market as a result of the FTA.

The Rise of UK Beauty Brands in India

The FTA marks a new chapter for UK-based beauty giants such as The Body Shop, which already enjoys a strong market presence in India. With the reduced tariffs, the company plans to increase its imports into India, making its products more accessible to a growing consumer base. Other major international players, such as Clinique and MAC Cosmetics, owned by Estée Lauder Companies, along with LVMH, the French luxury conglomerate that owns Dior and Tiffany & Co, are likely to expand their offerings in India through their British subsidiaries. This will bring a variety of global beauty products to India’s shores.

The Executive Chairperson of Quest Retail, Ms. Shriti Malhotra, who holds the sales, distribution, and marketing rights for multiple prestigious beauty brands, including The Body Shop, Kiehl's, Avon, and Anastasia Beverly Hills, stated that the FTA would significantly broaden their portfolio and lower the import duties, thereby benefiting Indian consumers directly. Additionally, she pointed out that the new tariffs would also positively impact the "Made in India" beauty products, which will see lower duties as well.

Impact on Retailers and E-commerce Platforms

The reduction in tariffs is set to benefit Indian beauty retailers such as Nykaa, Reliance Tira, and Shoppers Stop, which will have access to a broader range of global beauty brands. Online platforms like Amazon and Myntra, which sell a significant amount of premium beauty products, are also positioned to gain from the FTA. The Founder and CEO of Kindlife, Ms. Radhika Ghai, highlighted that the policy will cater to the growing demand among India’s 700 million young consumers, making it easier for them to access premium global beauty products at more affordable prices.

With the opening up of the market to more international brands, the FTA is expected to fuel competition in the Indian beauty space, especially for dominant players such as HUL, L'Oréal, and Procter & Gamble (P&G), which currently manufacture and sell beauty products in India. The entry of these global players through their UK subsidiaries is poised to intensify the competition, offering more choices for consumers and potentially lowering prices in the long run.

E-commerce Innovations and Increased Competition

The new FTA provisions are not just about bringing more products into the Indian market but also about enhancing the overall customer experience. Myntra, one of India’s leading fashion and beauty e-commerce platforms, recently announced the launch of global beauty brands such as YSL, Laura Mercier, and TirTir on its platform, signaling a new era of beauty e-commerce.

Additionally, Reliance Retail’s Tira has extended its e-commerce platform by introducing a service called Concierge, which will offer personalized beauty advisory services, product recommendations, and the option for pre-orders. This innovative service is designed to cater to the increasingly discerning Indian consumer, offering a more personalized and premium shopping experience for beauty products.

A New Era of Global Collaboration and Growth

The India-UK FTA represents a landmark agreement, setting the stage for enhanced collaboration and growth in the global beauty sector. By reducing tariffs on beauty products, India is opening the door to greater international trade, ensuring that both established and new brands can find a foothold in one of the world’s fastest-growing beauty markets. The FTA is expected to transform India into a key market for global beauty brands, offering them the opportunity to reach millions of Indian consumers eager to access premium international beauty products.

Conclusion

India’s beauty market is on the brink of an exciting transformation. With the FTA between India and the UK driving down import duties, the availability of global beauty brands is set to expand significantly. Companies like The Body Shop, Clinique, MAC, and LVMH will likely increase their product offerings in India, fueling a wave of competition and innovation in the beauty sector. Retailers like Nykaa, Reliance Tira, and Myntra are poised to capitalize on the growing demand, offering a more diverse range of premium beauty products to India’s young, beauty-conscious consumers. This FTA is set to usher in a new era of global collaboration and fuel the continued growth of India’s thriving beauty market.

The Upcoming IPOs in this week and coming weeks are Integrity Belrise Industries, Integrity Infrabuild Developers, Accretion Pharmaceuticals, Wagons Learning.

The Current active IPO are Virtual Galaxy Infotech.

Start your Stock Market Journey and Apply in IPO by Opening Free Demat Account in Choice Broking FinX.

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst.