India Opens Auto Market to UK Cars: Historic Trade Deal Struck

India has taken a significant step by agreeing to reduce customs duties on British cars, including those in the mass market segment, to 10% over five years as part of a newly signed free trade pact.

This marks the first time India has opened its auto sector under a free trade agreement. Notably, there are no concessions for electric, hybrid, and hydrogen-powered vehicles in the initial five years, and vehicles priced below GBP 40,000 remain excluded, protecting the domestic market.

The agreement is structured to reduce tariffs on imports, which are currently around 110%, to 10% under specific quotas. The pact favors large engine vehicles, with a quota of 37,000 units in the under 1,500cc segment seeing a gradual decrease in tariffs from 66% to 10% by the fifth year.

(With inputs from agencies.)