Indian automobile industry welcomes landmark India-UK Free Trade Agreement

New Delhi [India], July 25 (ANI): The Indian automobile industry has warmly welcomed the recently signed India-UK Free Trade Agreement (FTA), terming it as a landmark and transformative development in the global economic landscape.

Commenting on the agreement, Anish Shah, Group CEO & MD, Mahindra Group said, "It's not just a win for trade, but a blueprint for a modern, values-led partnership that puts innovation, sustainability, and inclusive growth at the heart of global collaboration."

Expressing Mahindra's strong support, Shah said, "At Mahindra, we believe deeply in the power of such cross-border partnerships to unlock economic potential, create high-quality jobs, and accelerate progress in future-facing sectors from green mobility and clean energy to digital technologies and advanced manufacturing."

The much-awaited landmark India-UK Free Trade Agreement was signed on Thursday, in the presence of Prime Ministers Narendra Modi and Keir Starmer, providing greater access to goods and services between the two countries.

Shailesh Chandra, President of the Society of Indian Automobile Manufacturers (SIAM) and Managing Director- Tata Motors Passenger Vehicles, echoed industry-wide optimism, "SIAM remains committed to working closely with the Government of India to ensure the benefits of the agreement translate into greater growth, global competitiveness, and technological progress for the Indian automotive industry."

He further emphasised the broader significance of the deal and said, "We view this agreement as part of a wider strategic engagement and believe it opens new avenues for collaboration and opportunity with a key global partner."

Under FTA, India has opened a Tariff Rate Quota (TRQ) for passenger cars from the UK. For large-engine petrol cars above 3000 cc and diesel cars over 2500 cc, India has committed to lower the current 100 per cent + customs duty to 10 per cent in a phased manner in over 15 years, within a quota starting at 10,000 units and rising to 19,000 units over five years.

For mid-sized cars (1500-2500 cc diesel / up to 3000 cc petrol), a 50 per cent in-quota duty applies initially, falling to 10 per cent by year five.

Small cars under 1500 cc follow a similar tariff reduction path with a growing quota. These in-quota vehicles enjoy sharply reduced duties, while out-of-quota imports still face tariffs ranging from 95 per cent to 50 per cent, depending on vehicle size and year.
The TRQ marks a major policy shift, especially as India has long used high tariffs to protect its domestic automotive industry.

By year five, up to 37,000 UK-built ICE vehicles could enter India annually at just 10 per cent duty--far below the current base rate of 110 per cent.

This creates a preferential entry path for high-end British brands such as Jaguar and Land Rover, both owned by Tata Motors, but also for other UK-based exports.

This is India's first-ever auto tariff concession in any FTA. (ANI)