The Free Trade Agreement (FTA) between India and the United Kingdom (UK) is set to benefit luxury car sales in India. Under this agreement, import tariffs on these cars will be reduced by 50% over the next 10 years.
Jaguar Land Rover (JLR) is expected to benefit the most, while other British brands like Aston Martin (which sold fewer than 25 cars in India in 2024), Rolls Royce, and McLaren will also gain from the deal.
Currently, JLR produces 60% of its cars in India using the completely knocked down (CKD) method. These vehicles are assembled locally and attract only 15% customs duty.
JLR plans to begin local assembly at its Tamil Nadu plant next year. At present, the Range Rover, Range Rover Sport, Velar, and Evoque models are made at the company’s Pune plant.
JLR is also exploring the option to locally assemble the Defender model, which is currently made at its plant in Slovakia.
Since Slovakia is not part of the India-UK FTA, the Defender doesn’t qualify for reduced tariffs yet.
Luxury Cars Could Be Up to 50% Cheaper
Tariffs and quotas will differ depending on the engine type, but experts believe British luxury cars could become up to 50% cheaper.
The auto industry is still reviewing the details of the agreement. Since 2022, McLaren has sold about 50 cars in India, and Rolls Royce sold around 60 vehicles in 2023 (latest figures are not available).
Reactions from Automakers
A spokesperson for JLR stated, “We welcome this FTA. It will help reduce tariffs on our luxury vehicles in India over time.
India is an important market for our British-made cars, and we see great growth potential here.”
A UK government representative said that no final decision has been made yet on the pricing of imported vehicles.
Martin Limpert, Global Managing Director of Range Rover, mentioned in an interview that the Defender has performed well in India, making local production a logical next step.
Currently, some of JLR’s high-end sports cars are imported as completely built units (CBUs), which will directly benefit from the FTA.
Mahindra and Maruti to Benefit Too
Companies offering both CKD and CBU vehicles stand to gain from this agreement.
Indian manufacturers like Mahindra & Mahindra and Maruti Suzuki, which have business interests in Europe, will also see benefits. For instance, Maruti currently sells its eVitara model in the UK.
What Mahindra Group CEO Said
Anish Shah, CEO and Managing Director of Mahindra Group, said, “Such international agreements boost economic growth, create good jobs, and support future industries like green mobility, clean energy, digital tech, and advanced manufacturing.
As Indian companies expand globally, we are ready to play a key role in this new phase of the UK-India relationship.”
ACMA Supports the Deal
The Automotive Component Manufacturers Association of India (ACMA) also welcomed the agreement.
They believe it will improve market access, technology collaboration, and integration of the automotive value chain between India and the UK.
ACMA President Shraddha Suri Marwah said the deal will be a big boost for India’s auto component industry.
It will open up new export opportunities, simplify regulations, and support growth in areas such as electric vehicles, precision engineering, and lightweight materials.
