Luxury cars not the biggest opportunity UK senses in India after FTA. It's this

Mint

4 days ago

The UK government expects bigger inroads of up to $240 million (about ₹2,076 crore) in auto parts and engine exports to India, surpassing luxury cars, after its free-trade agreement with India.
The pact opens up the Indian market for companies including GKN Automotive, Cosworth and Ricardo Plc, among others. According to the UK government's assessment, auto component exports will jump by about £190 million or 150%, suggesting that auto parts and engines to be a key winner for Britain as part of the trade deal.
While India's auto component industry doesn't see it as a challenge, the UK's assessment suggests a spike in imports from India in the next few years.
Tariff cuts, mutual benefits
Under the tariff agreement, most auto parts such as brakes, axles, airbags, suspensions, and engine components imported from the UK will see a gradual reduction in duties from 16% to 0% over 10 years. In return, the UK has agreed to waive 8.5% customs duty on Indian auto component imports.
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India exported auto parts worth approximately $191.6 million to the UK, while imports stood at around $138.6 million, according to Saket Mehra, Partner at Grant Thornton Bharat. 'With tariffs on components set to be significantly reduced, Indian manufacturers- particularly those supplying to global OEMs (original equipment makers), are well-positioned to expand their footprint in the UK market."
India has also opened up the market for luxury car imports from the UK. Total auto imports from the UK stood around $196 million in FY25, as per commerce ministry data.
Industry outlook
Better market access and competition from British players come at a time when the government is working on a plan to boost exports of the country's component players to better integrate them in global supply chains.
According to an industry consultant working with auto component players, there hasn't been any feeling of the FTA having a disruptive impact on the industry. "In conversations with executives at auto component makers, there is no sentiment that the FTA will have a disruptive impact for the Indian players due to opening up of the market," the person said.
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The analysts expect opportunities for British players in components in the clean vehicle value chain, while Indian players are expected to have new opportunities in internal combustion engine (ICE).
Strategic fit for India
The country's leading auto component body, the Automotive Component Manufacturers Association of India and many component players said the free-trade agreement will create more opportunities for the domestic industry.
"The deal is a significant milestone for the Indian auto component sector, unlocking new opportunities in exports, R&D collaboration, and sustainable manufacturing," said Nirmal K Minda, executive chairman at Uno Minda. 'It also aligns seamlessly with India's Make in India vision, strengthening our role in global supply chains."
Amit Kalyani, vice-chairman and joint managing director, Bharat Forge Ltd, said, 'Indian manufacturers can now tap into the UK market with greater competitiveness, improving their global footprint."
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The country's $111-billion auto component industry is a trade surplus sector. In financial year 2024-25, auto component exports stood at $22.9 billion against imports of $22.4 billion.
Among the largest exported components, the country dominates in engine parts shipped to various markets, including North America and Europe. Over $7 billion worth of exports went to the North American region alone in the last financial year.