Archive · 25 Jul 2025
India-UK Trade Agreement Lowers Import Duties on Luxury Cars
India and the UK have made a deal to make luxury cars from the UK cheaper in India.
This is part of a trade agreement.
Cars with regular engines will have their import taxes reduced, but there's a limit on how many can be imported at the lower tax rate each year.
Electric cars will have even lower taxes, especially those under a certain price.
This should make it easier for people in India to buy fancy cars from the UK.
The agreement is expected to benefit companies like Jaguar Land Rover.
The India-UK Comprehensive Economic and Trade Agreement (CETA) will reduce tariffs on UK-made luxury cars imported into India.
Tariffs on internal combustion engine (ICE) cars will be slashed, with the benefit limited by quotas, decreasing to 10% after 15 years.
Electric vehicles (EVs) priced under £40,000 will have tariffs eliminated; more expensive EVs will see reduced tariffs.
Tariffs on ICE trucks will also be reduced, with quotas applied, with the lowest tariffs at 8.8% after 10 years.
The agreement includes quotas to manage import surges and safeguard the Indian auto industry.
- Who
- Automakers and consumers in India and the UK.
- What
- The India-UK trade agreement is reducing import tariffs on UK-made cars.
- When
- Tariff reductions will begin upon the agreement's implementation.
- Where
- India and the United Kingdom.
- Why
- To make UK-made luxury cars more affordable in India and foster trade between the countries.
Indian Auto Industry
UK Automakers
Market Protection
Indian Auto Industry
Concerned about potential surges in imports impacting the domestic market.
UK Automakers
Agrees with the quota implementation to protect the Indian auto industry.
- Agreement:
- India-UK Comprehensive Economic and Trade Agreement (CETA)
- ICE Car Tariff (Year 1):
- 30-50% (quota applies); 60-95% (out-of-quota)
- ICE Car Tariff (Year 15):
- 10% (quota applies)
- EV Tariff (Under £40,000):
- 0%
- ICE Truck Tariff (Year 10):
- 8.8% (quota applies)
- Originating Criteria:
- 35% Qualifying Value Content (QVC)