India-UK FTA: A Mini Cooper For Rs 25 Lakh? Maybe, Just Maybe

The India-UK Free Trade Agreement has called for a reduction in auto tariffs to 10% from more than 100% at present, albeit up to a limit.

The duty-free access to import of internal-combustion vehicles from the UK is limited to a pre-defined quota. The duty-free quota on EVs is limited to only a few thousands with no scope of out-of-quota reduction in tariffs.

“The sensitivity related to EVs has been taken care of,” the FAQ document stated. “Further, the out-of-quota duty on ICE vehicles will be reduced gradually over a longer period of time, thereby helping our industries to absorb the incremental increase of imports from the UK.”

In simpler terms, certain luxury cars are set to get cheaper in India. And India’s electric cars will make their presence felt in the UK. Think Mini Cooper at Rs 25-30 lakh, and a Toyota Camry in the same ballpark.

The India-UK Free Trade Agreement has called for a reduction in auto tariffs to 10% from more than 100% at present, albeit up to a limit.

The duty-free access to import of internal-combustion vehicles from the UK is limited to a pre-defined quota. The duty-free quota on EVs is limited to only a few thousands with no scope of out-of-quota reduction in tariffs.

“The sensitivity related to EVs has been taken care of,” the FAQ document stated. “Further, the out-of-quota duty on ICE vehicles will be reduced gradually over a longer period of time, thereby helping our industries to absorb the incremental increase of imports from the UK.”

In simpler terms, certain luxury cars are set to get cheaper in India. And India’s electric cars will make their presence felt in the UK. Think Mini Cooper at Rs 25-30 lakh, and a Toyota Camry in the same ballpark.

“Indian consumers might be able to buy premium cars at the right price point as soon as they are launched globally,” Saurabh Agarwal, partner and automotive tax leader at EY India, told NDTV Profit. “It probably won't shake up Indian car manufacturers too much because most Indian consumers still prefer the more affordable options.” 

“What this agreement (India-UK FTA) really shows is that the government wants to create a level playing field, which is good news for all Indian consumers in the long run.”

Still, the deal needs to be reviewed with a fine-tooth comb. The fineprint includes a ‘quota’ for UK’s car exports to India, as well as ‘Rules of Origin’, which wasn’t immediately clear.

According to the UK government’s website, ‘Rules of Origin’ establish where a good was manufactured and whether it’s covered under a trade agreement. You’ll need to understand the ‘Rules of Origin’ to claim tariff preference when you are importing and prove the origin of goods you are exporting.

Nonetheless, the India-UK FTA should send a wave of cheer among auto enthusiasts. This writer, for one, wouldn’t mind a Mini Cooper for the price of a Mahindra XUV 700. Now to find the monies…

BluSmart cabs go back to Evera: Evera Cabs (Prakriti Mobility) has initiated repossession of 500 electric cabs formerly operated by BluSmart. The company has reclaimed 220 vehicles and the remaining 180 are set to be reclaimed in the coming days.

SEBI trouble for Ola Electric: The Securities and Exchange Board of India is looking into Ola Electric on two counts of insider trading between October and December 2024, at least three people aware of the matter told NDTV Profit. Its related-party transactions may also be under the SEBI scanner, as is its sales mismatch in February.

M&M’s outlook for FY26: After a record-setting year on the back of roaring SUV sales, Mahindra is preparing for an even better FY26. My colleague Hiral Dadia spoke with Group CEO Anish Shah on the road ahead.

Ather Energy Ltd.’s shares are trading below their IPO price, signalling a tepid response to India’s first major listing this fiscal, as traders looked for clues on the local equity capital market outlook.

On listing day Tuesday, shares of the electric scooter maker closed at Rs 302.30, a discount of almost 6% over their offer price of Rs 321 apiece. That scraped more than Rs 1,000 crore off the IPO valuation of Rs 11,956 crore.

“Ather is valued at six-times its enterprise value-to-sales, which is slightly higher than peers and the risk-reward may skew unfavourably in the near-term,” said Sanket Kelaskar, an analyst at Ashika Stock Broking Ltd. 

Ather Energy’s first-day trading was being keenly watched for signs of investor appetite for new listings. A nascent pick-up in IPO activity tracks the local stock market that was among the first to recover worldwide from losses triggered by US tariffs announced in early April.

Still, the equity selloff earlier this year on tariff-related concerns also left a mark on the IPO market as deal activity paused. Ather was the biggest offering in India in the fiscal year that started April 1. The last big initial share sale in the nation was Hexaware Technologies Ltd.’s $1 billion IPO in February.

LG Electronics, whose float of its Indian unit could have fetched as much as $1.7 billion, recently put on hold what would have been the country’s biggest IPO so far this year.

On May 7, 1998, Daimler AG bought Chrysler Group for $38 billion in a share swap deal to create DaimlerChrysler AG. The merger was to safeguard the long-term competitiveness of the companies involved. The Eagle brand was retired in the same year, and Jeep became a standalone division. By 2001, Plymouth was discontinued.

The merger didn’t stand for even a decade.

On May 14, 2007, Daimler Chrysler announced the sale of 80.1% of Chrysler Group to US private equity firm Cerberus Capital Management LP, which was renamed to Chrysler LLC.

The Global Financial Crisis of 2008 plunged Chrysler into bankruptcy, only to emerge a year later as part of a rescue plan steered by United Auto Workers Pension Fund, Italy’s Fiat SpA and the US and Canadian governments.

By 2014, Fiat SpA acquired Chrysler from UAW, making the Jeep maker its subsidiary. In May 2014, Fiat Chrysler Automobiles was established by merging Fiat SpA into the firm. Chrysler Group LLC remained a subsidiary until  Dec. 15, 2014, when it was renamed FCA US LLC to reflect their merger.

On Jan. 17, 2021, FCA merged with PSA (Peugeot SA) to become a subsidiary of the Stellantis Group, the world’s fifth largest carmaker with brands such as Abarth, Alfa Romeo, Chrysler, Citroën, Dodge, Fiat, Jeep, Lancia, Maserati, Opel, Peugeot, RAM and Vauxhall.

That’s all from us this week. Watch this space for more. Read more at ndtvprofit.com/auto

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