India and the UK have successfully concluded a landmark free trade agreement (FTA), which is expected to significantly impact the automotive sector in both countries. As part of the deal, India will lower tariffs on high-end cars imported from the UK, reducing them from 100% to just 10%. In return, India will gain from the elimination of tariffs on 99% of tariff lines, covering almost all of its trade value. However, both nations will introduce quotas for automobile imports to regulate the flow.
Luxury Cars from the UK to Get Cheaper
With the new FTA in place, British luxury car brands like Jaguar Land Rover (JLR), Aston Martin, Bentley, and Rolls-Royce are poised to benefit from lower prices in India. The drastic reduction in import duties on UK-made cars will likely result in price cuts across these premium brands’ portfolios. The deal also includes a favorable “rules of origin” agreement, meaning that cars exported to India may not need significant local content to qualify for the reduced tariff.
In 2024, India imported Rs 650 crore worth of cars from the UK, with motorcycle imports valued at Rs 30 crore. The deal could make high-end British cars more accessible to Indian buyers.
Triumph and Other UK Bikes to Become Affordable
The agreement also includes provisions for motorcycles. Limited-edition Triumph bikes—like the Rocket 3 Evel Knievel edition—which are directly imported from the UK, are expected to become more affordable. However, the exact price reductions will depend on further clarification of the tariff rules.
Opportunities for Indian Automakers
Indian manufacturers like Mahindra, Maruti Suzuki, Toyota, Bajaj, and Royal Enfield are also set to benefit. The tariff eliminations will open doors for Indian brands to export made-in-India models to the UK. For instance, Mahindra plans to introduce its BE 6 and XUV 9e electric vehicles (EVs) to the UK, taking advantage of the competitive pricing enabled by the FTA.
Additionally, Maruti Suzuki and Toyota will be able to price their EV models more competitively in the UK market, where they will face competition from other manufacturers like Mahindra.
JLR’s India Production to See Price Cuts
Jaguar Land Rover, which already manufactures some of its models at its Pune plant, may also benefit from the FTA. Models like the Range Rover Evoque, Range Rover Velar, and Discovery Sport could see price reductions in India, as the company may be able to export more efficiently from its local manufacturing facilities.
Indian bike manufacturers Royal Enfield, TVS, and Bajaj will likely see price rationalization in the UK market as well. Royal Enfield’s entire portfolio, which is sold in the UK, will benefit from the FTA, and other brands like Piaggio, TVS, and Bajaj could also see reduced prices for select models, including Triumph 400s and sub-400cc KTMs.
