The recently signed India-UK Free Trade Agreement (FTA) marks a notable shift in the landscape of automotive trade between the two nations. While the overall trade value of the deal remains modest, its impact on the auto sector—particularly in the premium segment—is expected to be significant. The agreement brings a strong tilt in favor of British automobile exports to India, thanks to the large disparity in current import duties.
Presently, vehicles imported from the UK into India face steep tariffs ranging from 60% to 100%, making them significantly more expensive for Indian consumers. In contrast, Indian auto exports to the UK are subject to only around 10% duties. This imbalance means the FTA is decidedly more favorable for the UK, especially when it comes to luxury vehicles and motorcycles.
One of the most visible effects of the FTA will be felt in the pricing of premium car imports. Brands like Jaguar Land Rover (JLR), Audi, Porsche, and Mercedes-Benz, which currently face high import duties, stand to benefit enormously. For example, models such as the Audi Q7, Porsche Taycan, and certain Mercedes-Benz offerings could see noticeable price reductions in the Indian market. With duties lowered or removed, these cars will become more accessible to premium car buyers in India.
The motorcycle segment also stands to gain, particularly for British brand Triumph. With models like the Rocket III Roadster, Tiger Explorer, Tiger 800 XC, and Thunderbird Storm in its lineup, Triumph is likely to become more competitive on pricing, offering Indian consumers greater value in the premium bike space.
Among Indian companies, Tata Motors emerges as a major winner from this agreement. As the owner of Jaguar Land Rover, Tata stands to benefit directly from the reduction in import duties. This move supports Tata’s ongoing strategy of strengthening its presence in the premium automotive segment in India. An increase in JLR sales, thanks to better pricing, would reinforce Tata Motors’ market position and profitability.
Eicher Motors, the parent company of Royal Enfield, is another Indian company that may quietly benefit. Royal Enfield already has a strong export presence in the UK, with annual exports worth around ₹10 billion. The FTA will help Eicher maintain or slightly grow these volumes, while improving margins due to reduced duties. While the impact may not be transformative, it remains clearly positive.
On the other hand, Indian car exports to the UK—such as the Maruti Baleno, Hyundai Verna, Kia Sonet, Nissan Sunny, and models from Tata like the Harrier, Tigor, and Nexon—will also benefit, but to a lesser extent. The reduction in UK duties will help these vehicles remain price-competitive in the UK market, offering a marginal advantage to Indian OEMs.
In summary, the India-UK FTA represents a win for premium UK automotive brands seeking to expand in the Indian market. The asymmetric tariff reductions clearly favor British exports. For India, the benefits are more modest, largely helping maintain existing competitiveness in exports to the UK. Tata Motors (through JLR) and Triumph are among the biggest beneficiaries, while Royal Enfield and other Indian OEMs gain modest but meaningful support. For Indian consumers, especially in the luxury segment, the FTA could mean more choice and better prices in the months to come.
Disclaimer:
The views and opinions expressed in this article are for informational purposes only and do not constitute financial, investment, or trade advice.
