In a watershed moment for the automotive and trade relationship between India and the United Kingdom, both nations have finalised a landmark Free Trade Agreement (FTA) after nearly three years of complex negotiations.
The bilateral deal, which has been hailed by Indian Prime Minister Narendra Modi as a “historic milestone”, shall provide a major deduction on India’s import duties on high-end vehicles manufactured in the UK from over 100 percent to a significantly lower 10 percent under a defined quota system.
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While luxury British automobiles had been revered by many across India, accessibility to them remained difficult due to the heavy pricing; the policy shift is expected to reshape the pricing, import, and market accessibility, with implications for both consumers and industry stakeholders.
The deal comes at a time of heightened tension in the Indian subcontinent with India and Pakistan initiating armed forces operations against each other incited by the deadly terrorist attacks that took place in Kashmir’s Pahalgam where 26 civilians were killed in a religiously–driven act of terror.
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However, India remains steadfast in its commitment to fostering stronger economic ties with allied global economies such as the UK even in these trying times. British Prime Minister Keir Starmer is expected to formally sign the agreement during an upcoming state visit to India.
According to the official communiqués, the FTA will eliminate tariffs on 99 percent of Indian products entering the UK, while simultaneously opening British markets for Indian professionals. But perhaps the most headline-grabbing provision lies in its implications for the automotive sector.
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UK-based luxury carmakers such as Jaguar Land Rover (JLR), Rolls-Royce, Bentley, Aston Martin, and Mini Cooper are poised to benefit substantially, with manufacturers to import a limited number of fully built vehicles at the new 10 percent duty rate.
With tariffs being lowered on Indian exports to the UK, Indian automobile manufacturers such as Mahindra & Mahindra, Maruti Suzuki, Tata Motors, TVS, Royal Enfield, and Bajaj are preparing to scale up their exports of both, conventional and electric vehicles to expand their foreign presence.
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Sources state that Mahindra has already confirmed plans to introduce its BE 6 and XUV 9e electric models in the UK as part of a phased rollout, while Maruti Suzuki’s e-Vitara and Toyota’s Urban Cruiser are also poised for UK market entry under the new trade framework.
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With implementation slated to roll out in phases over the coming months, the India-UK FTA stands to reconfigure the trade architecture in the auto sector, driving in an era where a broader class of Indian consumers can afford world-renowned luxury marques, while Indian EVs and two-wheelers would gain a stronger footing in international markets.
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