India-UK Trade Agreement Reduces Import Duties on Luxury Vehicles

In a significant move, India has agreed to slash import duties on luxury cars from the UK, reducing rates from over 100% to as low as 10%. This change benefits high-end brands like Jaguar, Land Rover, Rolls-Royce, Bentley, and Aston Martin, marking a pivotal shift in India's trade policy.

Protection for Domestic EV Manufacturers

However, the deal excludes electric vehicles (EVs), hybrids, and hydrogen-powered cars from duty concessions for the first five years. This decision aims to shield domestic manufacturers as they ramp up production of eco-friendly vehicles, ensuring India's competitive edge in the global EV market.

Quotas and Limits to Safeguard Local Industry

The agreement introduces quotas to limit the number of vehicles eligible for reduced tariffs, protecting Indian automakers and preventing mass imports. For instance, large-engine petrol and diesel cars will see duties drop to 10% over 15 years, within a gradually increasing quota.

Future Implications and Global Reactions

Analysts predict this deal could set a precedent for future trade agreements, with countries like Japan, the EU, South Korea, and the US likely to seek similar concessions. The policy not only opens India's automobile market to UK exports but also signals a broader liberalization of trade in luxury goods.