India has agreed to progressively lower import duties on British vehicles and permit the entry of 3.78 lakh conventional-engine passenger cars over the next 15 years under the India-UK Comprehensive Economic and Trade Agreement (CETA).
The agreement, which comes into force on July 15, is expected to reshape automotive trade between the two countries while creating new export opportunities for Indian electric vehicle manufacturers.
Under the pact, import duties on select UK vehicles will fall from around 110 per cent to 10 per cent within a quota-based system.
British carmakers get phased access to the Indian market
The agreement introduces a controlled import framework covering multiple vehicle categories.
NDTV noted that India will allow the import of 20,000 passenger cars during the first year itself.
Luxury vehicles with engine capacities above 3,000cc for petrol and 2,500cc for diesel will receive the largest share of quotas, while mid-sized and mass-market segments will also be included.
By the fifth year, the total annual import quota will increase to 37,000 units before gradually stabilising.
From the fifteenth year onwards, the annual quota will settle at 15,000 vehicles with a fixed import duty of 10 per cent.
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Indian EV makers stand to gain in the UK
NDTV noted that the agreement also creates export opportunities for Indian manufacturers in Britain’s growing electric mobility market.
Indian companies such as Tata Motors, Mahindra & Mahindra and Maruti Suzuki will gain duty-free access to export electric, hybrid and hydrogen-powered passenger vehicles to the UK beginning from the sixth year of the agreement.
The quota for Indian exports in these segments will gradually expand and eventually reach 88,000 units annually from the fifteenth year onwards.
This is expected to strengthen India’s position as an emerging global hub for affordable electric mobility.
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India protects its domestic mass-market EV ecosystem
Despite opening parts of its automobile market, India has protected its domestic electric vehicle industry.
Vehicles priced below GBP 40,000 have been excluded from concessions, ensuring local manufacturers retain an advantage in the mass-market EV segment.
British electric, hybrid and hydrogen vehicles will initially receive no benefits during the first five years.
Concessions will begin from the sixth year with limited quotas and reduced duties, primarily targeting premium vehicles priced above GBP 40,000.
