India-UK Free-Trade Pact Opens Up European Market for Indian Automakers

Strategic Insights -

India's auto industry is set to benefit from the recent free-trade pact with the UK, as the Comprehensive Economic and Trade Agreement (CETA) removes 18% duty on exports to the European nation. Domestic clean mobility market is also protected from concessions to the UK, with no preferential customs duty on zero-emission vehicles. This move is expected to boost sales of Indian-made electric and hybrid vehicles.

Key Takeaways:

  • The India-UK CETA removes 18% duty on exports to the UK, providing a competitive advantage for Indian automakers.
  • Domestic hybrid vehicle sales rose 12% year-on-year to 365,024 units in FY25, while pure electric vehicle (EV) sales increased 17% to 1,967,313 units.
  • Luxury car imports from the UK will become cheaper in India, benefiting models from companies like Tata Group-owned Jaguar Land Rover, Aston Martin, and Rolls-Royce.
  • Indian companies, including TVS Motor Co. and Hero MotoCorp Ltd, stand to gain from the agreement and plan to expand their presence in the UK market.
  • The pact also outlines a 15-year plan for gradually reducing import duties on various UK-made goods, including fossil fuel cars, high-end hybrid, electric, and hydrogen vehicles.

Statistics:

  • 18% duty removed on exports to the UK
  • 365,024 hybrid vehicle units sold in FY25 (12% increase year-on-year)
  • 1,967,313 pure electric vehicle units sold in FY25 (17% increase year-on-year)
  • 51,000 luxury car sales in FY25
  • 15-year plan for gradually reducing import duties on UK-made goods

Sources:

  • Published by HT Digital Content Services with permission from HT Chandigarh
  • Data from the Vahan portal