Archive · 31 Jul 2025
India-UK Trade Deal: Few Wins for UK Automakers
The India-UK trade deal isn't making things easy for British car companies.
Although there's a deal to lower import taxes on cars, the rules are strict.
Only a few cars can be imported with lower taxes, and most of the tax cuts won't happen for a while.
Luxury electric or hybrid cars might have a better chance, but even that is limited.
British car makers may need to build cars in India or team up with Indian companies to succeed.
UK automakers face strict quotas and high tariffs for car imports into India.
Significant tariff reductions, down to 10%, are expected by 2031, for a limited number of cars.
Only about 4% of UK petrol and diesel vehicles can be exported to India at the lower rate.
Electric and hybrid vehicles, particularly luxury models, see aligned tariff reductions.
UK carmakers may explore local assembly and partnerships to bypass tariffs.
- Who
- UK automakers, the governments of India and the UK, and Indian consumers.
- What
- Impact of the India-UK free trade agreement on UK automakers' car exports to India.
- When
- The India-UK free trade agreement was recently implemented.
- Where
- India.
- Why
- To foster trade and reduce tariffs between India and the UK.
Impact on UK Automakers
Impact on Indian Market
Market Access
Impact on UK Automakers
UK Automakers hoped for wide access.
Impact on Indian Market
They face strict quotas and high tariffs.
- Tariffs (Initial)
- 30-50%
- Tariffs (by 2031)
- 10% (for a capped number of cars)
- Vehicle Quota (at lower rate)
- About 4% of UK petrol and diesel production
- Eligible EV Brands
- Bentley, JLR (high-end)
- Qualifying EV Price
- Above £40,000
