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India's auto duty concession to UK depends on engine, price
India's offer to the UK is very nuanced, official says

India's auto duty concession to UK depends on engine, price

May 25, 2025
05:52 pm

What's the story

India's proposal to the United Kingdom, in terms of duty concessions in the automobile sector under their Free Trade Agreement (FTA), is complex and detailed. An official of the Indian government has now revealed to PTI that these concessions are dependent on engine capacity as well as the prices of vehicles.

Phased approach

Auto sector concessions to be phased over 10-15 years

The Indian government has added enough safeguards in the FTA with the UK, to shield sensitive sectors. As far as automobile duties are concerned, they will be phased out over a period of 10-15 years. The official stressed India's offer to the UK is very nuanced, considering several factors in the auto sector.

Trade boost

Boosting trade between India and UK

On May 6, India and the UK announced the successful conclusion of negotiations for their trade pact. The deal seeks to cut tariffs on 99% of Indian exports while facilitating the imports of British products such as whisky and cars to India. Ultimately, the two countries hope to double bilateral trade by 2030 from the current $60 billion.

Tariff reduction

FTA to significantly reduce tariffs on automotive imports

Under quotas on both sides, the FTA will drastically cut tariffs on automotive imports from over 100% to 10%. This is expected to benefit companies like Tata-owned JLR. Notably, Tata Motors Group CFO PB Balaji had previously said that this agreement will drive JLR's performance in India, benefit future cars, and allow customers to access global cars much faster.

Market impact

Luxury car manufacturers respond to FTA

Luxury carmakers Mercedes-Benz and BMW have welcomed the FTA. They called it a positive development but added that it would not make much difference to luxury car prices in India.