India Offers Quota-Based Auto Concessions In UK FTA To Shield Domestic Industry
The move aims to protect India’s domestic auto industry from a full-scale tariff cut while extending preferential access to a restricted set of luxury vehicle segments.
India has offered limited, quota-based concessions to the UK on high-end automobiles and electric vehicles (EVs) under the recently-signed free trade agreement (FTA), according to the Commerce Ministry.
The move aims to protect India’s domestic auto industry from a full-scale tariff cut while extending preferential access to a restricted set of luxury vehicle segments.
The FTA grants a phased tariff reduction to UK vehicles with petrol engines above 3000 cc and diesel engines above 2500 cc. Import duties on these large engine cars will be reduced to 10% over the first five years. However, mass-market cars and smaller engine vehicles are excluded from any concessions, ensuring that India’s growing automobile ecosystem remains insulated from foreign competition.
For electric, hydrogen, and hybrid vehicles, no concessions will be offered during the first five years of the deal. Even after this period, the market access will be limited. Crucially, only EVs priced above Rs 40 lakh will be eligible for any tariff relief. The effective relaxations will apply largely to luxury EVs costing over Rs 80 lakh, shielding India’s affordable EV segment.
The total import quota is capped at 37,000 units over 15 years, with out-of-quota imports attracting a 50% tariff reduction spread over a decade. This ensures that India can continue to incentivise domestic manufacturing while facilitating a carefully controlled inflow of premium UK vehicles.
According to officials, India’s market access gains for EVs under the FTA are four times larger than the concessions extended to the UK EV industry.
Notably, UK-based Jaguar Land Rover (JLR), owned by India’s Tata Motors, is seen as one of the biggest beneficiaries of this arrangement, especially for its high-end, imported models like Defender.
“We welcome this free trade agreement between the UK and India, which over time will deliver reduced tariff access to the Indian car market for JLR's luxury vehicles. India is an important market for our British built products and represents significant future growth opportunities," said a spokesperson for JLR.
The company added that no decisions have been taken on pricing as of yet.
