India agreed to slash duties on automobiles from over 100 per cent to 10 per cent, but largely in the premium segment of the automobile market and not across the board with quotas in place, a UK official said on Tuesday.
India’s opening up of the automobile sector assumes significance as similar demands are expected to arise in free trade agreement (FTA) talks with the EU, US, and other countries. The move comes after years of high duties that helped boost domestic manufacturing of automobiles and auto parts.
Notably, India has emerged as the fourth-largest global producer — after China, the US, and Japan — with annual production nearing 6 million vehicles.
An Indian government official also stated that India’s duty concession offer for the auto sector under the FTA with the UK is “very nuanced”, with relaxations and quotas linked to engine capacity and vehicle prices.
“The duty cut and quota depend on engine capacity and the price of vehicles. There are a lot of nuances in the auto sector. India’s offer to the UK is very nuanced,” the official added.
On May 6, India and the UK announced the conclusion of negotiations for the trade pact, which will lower tariffs on 99 per cent of Indian exports and make it easier for British firms to export whisky, cars, and other products to India — boosting the overall trade basket.
In 2024, India exported $13.5 billion worth of goods to the UK. Of this, about $6 billion—or 44 per cent—comprising items like textiles, footwear, carpets, cars, seafood, and fruits such as grapes and mangoes, will now enter the UK duty-free.
Story continues below this ad
“The UK will gain significantly from the FTA. Currently, over 93 per cent of its exports to India face moderate to high tariffs. Under the deal, India will cut tariffs on 90 per cent of UK products—starting with 64 per cent of them becoming duty-free from day one. This includes items like salmon, lamb, aircraft parts, machinery, and electronics. Over the next 10 years, India will gradually lower tariffs on another 26 per cent of UK goods, such as chocolates, soft drinks, cosmetics, and auto parts. India will not cut tariffs on silver, which is the largest,” think tank GTRI said.
© The Indian Express Pvt Ltd