India-UK Free Trade Agreement to Drive Down Premium Cars, SUV Prices
The recent Free Trade Agreement (FTA) between India and the United Kingdom is set to bring down import duties on certain high-end cars and SUVs imported from the UK. This development has generated excitement among luxury car buyers in India.
Currently, India imposes import duties exceeding 100 percent on some imported vehicles. However, under the FTA, these tariffs are expected to be significantly reduced. According to the UK’s Department for Business & Trade, India will slash tariffs on made-in-UK cars and SUVs to 10 percent under a specific quota, although the details of this quota have not been disclosed.
The reduced tariff is likely to apply to a limited number of imported cars and SUVs, potentially resulting in a substantial reduction of over 90 percent in total import duties on made-in-UK vehicles. This could lead to a significant decrease in the prices of these luxury cars in the Indian market.
The Indian market already features various models originating from the United Kingdom, including brands like Bentley, Jaguar Land Rover, Aston Martin, Rolls-Royce, and Mini. These brands are imported to India as Completely Built Units (CBU), contributing to their high price tags. Some two-wheeler manufacturers, such as Triumph Motorcycles, also fall under this category.
The Indian government has indicated that the FTA will positively impact manufacturing in both labor-intensive and technology-intensive sectors. It is also expected to create new export opportunities for India’s automobile manufacturing industry, particularly in the realm of ‘auto components and engines’.
Prime Minister Narendra Modi, in a social media post, described the FTA as a ‘historic milestone’ that will deepen the Comprehensive Strategic Partnership between India and the UK. He emphasized that the agreement will catalyze trade, investment, growth, job creation, and innovation in both economies.
As the FTA comes into effect, luxury car buyers in India may soon see a reduction in prices for premium cars and SUVs imported from the UK. This development is expected to boost the automotive industry in both countries and provide more affordable options for consumers.
