India-UK Free Trade Agreement: Cheaper British Cars With A Catch

India-UK FTA to lower luxury car duties but under strict quotas

The recently signed Free Trade Agreement (FTA) between India and the United Kingdom is set to reduce import duties on select British luxury cars, offering potential price cuts for high-end buyers in India. However, the benefits will be limited due to a quota-based structure, which restricts the number of vehicles eligible for the lower duty.

Under the new trade pact, India will cut import tariffs on UK-made automotive imports from the current 100–110% to 10% but only for a fixed number of completely built units. Vehicles imported beyond this quota will continue to attract standard duties. The specific quota size is yet to be announced, leaving automakers and buyers awaiting further clarity.

Jaguar Land Rover stands to gain the most from this agreement, particularly for exclusive models like the Range Rover SV and upcoming Jaguar EVs, which are manufactured in the UK and currently taxed at high rates. Most JLR vehicles sold in India, such as the Range Rover Sport, Velar and Evoque, are locally assembled and already avoid full CBU tariffs, so the FTA’s impact will be limited to niche models.

Interestingly, the popular Land Rover Defender, built in Slovakia, will not qualify for the reduced duties. However, JLR is evaluating the possibility of assembling the Defender in India, a move that could cut its prices by up to 20%. The company will need to decide whether to allocate the UK CBU quota to such models or to prioritise high-margin exports like the SV range.

Other British brands like Mini, Rolls-Royce, Bentley and Aston Martin are also expected to benefit, though eligibility could vary depending on where a particular model is assembled or finished. Mini’s UK-built Clubman and Countryman are likely to become more affordable under the new regime.

The primary drawback remains the capped quota, expected to cover only a few thousand units annually. Once this limit is reached, the regular 100%-plus import duty will resume, which means manufacturers must carefully plan pricing and allocations to maximise the FTA’s advantages.