UK-India FTA: British Luxury Cars & Motorcycles Become More Affordable in India

Along with cars, motorcycles manufactured in the United Kingdom will now be more affordable in India because both countries have signed the India-UK FTA. Under the recent FTA,  the applicable tariff on fully imported made-in-UK vehicles will be reduced from over 100% to 10% under the quota. This free trade agreement between India and the United Kingdom will particularly benefit the British luxury automobile manufacturers, including Rolls Royce, Bentley, Jaguar Land Rover, Lotus, and Aston Martin, McLaren, as well as British two-wheeler manufacturers like BSA (owned by Classic Legends), Northon (owned by TVS), and Triumph Motorcycles. 

Rolls-Royce, Bentley, Land Rover, McLaren, and Lotus to Get More Affordable

After the FTA between both countries, the prices of British luxury vehicles will significantly drop in India, which can range in crores. Typically, luxury cars from British brands are imported into India as a completely built-up (CBU) route, making the vehicle around 4x more expensive than its factory pricing.

Under the India-UK FTA, there is zero tariff duty applicable on limited numbers of cars and SUVs imported into the market. In this update, the UK government said it had secured India's best-ever agreement on rules of origin, indicating that the cars exported to India may not require local content to comply with the updated tariff rules. 

India Imported Rs 650 Crore Worth of Luxury Cars from the UK in 2024

In 2024, India imported Rs 650 crore worth of luxury cars, while the two-wheeler imports recorded Rs 30 crore. The Indian government website also confirms that the auto parts imported from the UK were worth Rs 1,150 crore during the last year. 

Among the major luxury car brands in India, including Mercedes-Benz, BMW, Bentley, Ferrari, and Rolls-Royce, Jaguar Land Rover accounted for imports worth Rs 500 crore. Despite a major price drop in made-in-UK cars, the limited edition Triumph motorcycles will also become cheaper.

Indian Automobile Manufacturer to Benefit from India-UK FTA

Indian automobile manufacturers like Mahindra, Royal Enfield, TVS, Bajaj, and several international brands that manufacture in India, including JLR, Maruti Suzuki, and Toyota, will also benefit from the latest India-UK FTA. These brands are currently exporting or planning to export their vehicles to the UK market. 

Mahindra Executive Director and CEO for Auto & Farm Sectors recently stated that the company wants to launch the Mahindra BE 6 and Mahindra XUV 9e in the United Kingdom. The FTA will help Mahindra and all other companies keep their models' competitive pricing in this international market. 

Mahindra and Toyota's first EVs, which include the Grand e-Vitara and Urban Cruiser, are manufactured in Suzuki's India plant in Gujarat and exported to international markets, including the UK. On the other hand, JLR locally assembles its Range Rover Evoque, Range Rover Velar, and other flagship models in its Pune plant, and for these models, the pricing is expected to drop in the coming months.