The landmark Free Trade Agreement between India and the United Kingdom, signed recently, is set to transform the automotive industry. It is expected to bring a host of benefits for both, the manufacturers and consumers. Among the most impactful measures is the reduction in tariffs on automotive imports, dropping from over 100% to just 10% under a quota system, as outlined in a statement on the UK government’s official website.This move is expected to make luxury British cars more affordable for Indian buyers, while also opening up new avenues for Indian automakers in the UK.The FTA introduces a structured quota system for tariff reductions, starting with internal combustion engine vehicles before extending to electric vehicles and hybrids. However, the exact size of the quota has not yet been disclosed.The agreement allows for duty-free imports of ICE vehicles from the UK under specific quotas, providing Indian consumers with greater access to premium brands like Jaguar Land Rover (JLR), Rolls-Royce, and Aston Martin.
The trade agreement is expected to have a ripple effect on India’s automotive exports as well. With the UK market now more accessible, Indian automakers are likely to find new opportunities for growth in both the auto and auto components sectors. TVS Motor Company, which owns the British brand Norton, sees this as a chance to expand its presence in the UK. Speaking to PTI, TVS Motor Company MD Sudarshan Venu expressed optimism, stating that the FTA would enable Norton to “scale faster” in global markets.The deal comes at a time when India’s EV market is on a growth trajectory. According to the Federation of Automotive Dealers Association, electric passenger vehicle sales in India surged by 56.87% in April 2025, climbing to 12,233 units compared to 7,798 units during the same period last year. This momentum is expected to accelerate further with the entry of more British-made electric cars at competitive prices. (Inputs from PTI).
