Luxury cars and bikes to get cheaper with India-UK free trade agreement

Business Standard

2 days ago

India-UK Free Trade Agreement (FTA) is likely to boost market access for high-end luxury cars thanks to lower tariffs. However, players like Jaguar Land Rover (JLR) already make 60 percent of the cars they sell in India locally.
Possibilities remain to assemble the Defender model in India in the future, given that the car is currently manufactured at the carmaker's Slovakia plant, which is outside the purview of the India-UK FTA.
Under the UK-India FTA, tariffs on automotive imports will come down from 110 percent to 10 percent under various quotas (for different powertrains) on both sides.
JLR is likely to be the biggest beneficiary of this move. Players like Aston Martin (which sold less than 25 cars in India in 2024, according to market sources), Rolls-Royce, and McLaren are also likely to benefit from the reduced import duty. The quota and the duty structure vary with engine type, and therefore, industry insiders believe these British luxury cars could be cheaper by 50 percent or more. The industry is still studying the fine print of the deal. McLaren has sold around 50 cars in India since 2022, while Rolls-Royce is estimated to have sold around 60 cars in 2023 (the latest data is not available).
"We welcome this free trade agreement between the UK and India, which over time will deliver reduced tariff access to the Indian car market for JLR's luxury vehicles," a JLR spokesperson said in a statement, adding that India is an important market for the company's British-built products and represents significant future growth opportunities. In a separate query regarding a change in pricing of imported products into the Indian market, a UK-based spokesperson said, "No decisions have been made on pricing."
Interestingly, the remaining 40 percent of JLR cars sold in India include the Defender range, which is manufactured at the Nitra plant in Slovakia and falls outside the scope of this FTA. In a recent interview, Martin Limpert, Global MD for Range Rover, had said that the Defender is a 'very successful' car in the Indian market, and hence it is 'natural' for them to look into local production.
'Defender is a big volume car, very successful for us in the Indian market, so yes, it's natural for us to look into that (local production). We wouldn't exclude it,' he said.
At the moment, a few high-value SV models of JLR are imported as completely built units from the UK, which will stand to benefit.
Apart from luxury cars, bike enthusiasts can be happy too – players like Triumph, which sell both CKD and CBU models, will stand to benefit. Triumph sold around 30,000 bikes in India in 2024. The success in India is partly attributed to the partnership with Bajaj, which resulted in the introduction of the Speed 400 and Scrambler 400 X models.
Domestic carmakers like Mahindra & Mahindra and Maruti Suzuki, who have European ambitions, also stand to benefit. Maruti sells the e-Vitara in the UK, and Mahindra has plans for European expansion.
Anish Shah, Group CEO and MD, Mahindra Group, says, '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 such as green mobility, clean energy, digital technologies, and advanced manufacturing.' He added that as the Indian industry becomes increasingly global in its footprint and ambition, Mahindra looks forward to contributing meaningfully to this next chapter of UK-India cooperation.
The Automotive Component Manufacturers Association of India (ACMA) welcomed the deal and hoped that it will foster greater market access, technology partnerships, and value chain integration between the Indian and British automotive industries. The deal is expected to benefit the Indian auto component sector through enhanced opportunities for exports, streamlined regulatory processes, particularly in key areas such as electric mobility, precision engineering, and lightweight materials, ACMA President Shradha Suri Marwah said in a statement.