India-UK Free Trade Agreement and its benefits
India and United Kingdom have signed a Free Trade Agreement (FTA) which will reduce tariff on high-end cars imported from the United Kingdom.
Currently, India levies over 100 per cent of its duties on some imported vehicles, but with the FTA in place, India will cut down the tariffs on made-in-UK cars and SUVs which will bring the tariffs down to 10 per cent under a quota.
The details of the quota have not been disclosed but the slashed tariffs are likely to be applied on a limited number of cars and SUVs. The result will be 90 per cent slash in tariffs and thus reduction in prices of these cars in the Indian market.
Addressing the FTA, Prime Minister Narendra Modi stated in his social media post on X (formerly twitter), "In a historic milestone, India and the UK have successfully concluded an ambitious and mutually beneficial Free Trade Agreement, along with a Double Contribution Convention. These landmark agreements will further deepen our Comprehensive Strategic Partnership, and catalyse trade, investment, growth, job creation, and innovation in both our economies."
The Indian market currently has multiple car, SUV and bike models with UK origins and are sold in the country as CBU units. Brands like Bentley, Jaguar Land Rover, Aston Martin, Rolls-Royce and Mini import select models from UK and we can expect considerable discounts with the FTA now in place.
TVS Motor Company Managing Director, Sudarshan Venu told news agency PTI that the FTA between the two countries would help its British brand 'Norton' to scale faster.
"Our British brand 'Norton' will launch later this year and this agreement will help us scale faster and leverage common supply chains. We are excited as we further progress towards Viksit Bharat," he added.
Courtesy of the FTA is also likely to hike the exports to the UK by 2027 in terms of apparel, auto components, and chemicals.
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