MUMBAI, May 7, 2025: The India-UK Free Trade Agreement (FTA) is poised to revitalise the UK automotive industry by lowering tariffs on British components and vehicles from 100% to 10%, significantly benefiting manufacturers such as JLR, BMW, Mercedes-Benz, Rolls-Royce, Aston Martin, and Bentley, which collectively represent nearly 2000 crores in imports into India.
This reduction will increase the accessibility of British-made vehicles to Indian consumers, allowing UK manufacturers to enter one of the world’s fastest-growing automotive markets alongside domestic automakers, said senior industry and government officials.
Government officials in both countries have praised the agreement as a critical economic and strategic achievement that will pave the way for stronger bilateral relations. The deal not only strengthens the UK’s position as a global trading entity in the post-Brexit landscape but also solidifies India’s position as an important partner in international trade, according to the UK India Business Council, which praised the landmark FTA.
Noting that 85% of goods will be completely tariff-free within a decade. Richard Heald, OBE, Chair of the UK India Business Council, stated, “The signing of the UK-India FTA marks a significant milestone, reflecting the profound trust, shared values, and mutual aspirations characterising the UK-India partnership.” This agreement will open up new business opportunities, boost economic growth, create jobs, and encourage innovation and collaboration across sectors.
We are pleased to have worked closely with both governments and businesses throughout the negotiation process. Our members and clients are excited to explore the new opportunities that this historic agreement will bring.
The UKIBC is committed to assisting businesses in navigating the new framework and fully capitalising on the benefits of this agreement.
‘This reduction will increase the accessibility of British-made vehicles to Indian consumers, allowing UK manufacturers to enter one of the world’s fastest-growing automotive markets. Government officials from both countries have praised the agreement as a critical economic and strategic achievement that will pave the way for stronger bilateral relations. The agreement not only strengthens the UK’s status as a global trading entity in the post-Brexit era, but it also cements India’s position as an important partner in international trade.” UK IBC has said
Domestic automakers, including Switch Mobility operating in the UK, have praised the agreement, as stated by Mahesh Babu, CEO of Switch Mobility. He remarked, ‘The India-UK Free Trade Agreement (FTA) is a timely and strategic initiative that will create new opportunities in the electric mobility and sustainable transport sectors. By fostering technology partnerships and facilitating market access, this agreement will significantly contribute to the acceleration of the green transition in both the UK and India. We commend the government’s dedicated efforts to align trade policy with climate and innovation objectives.’
Sunjay Kapur, Chairman of Sona Comstar, also noted that the UK FTA represents a significant advancement in our strategic collaboration. He stated, ‘The FTA encompasses considerable tariff reductions on automotive parts and components. Although specific rates are still to be disclosed, tariffs on vehicles manufactured in the UK are set to decrease from over 100% to 10% under a quota system, suggesting similar concessions for components. This development is anticipated to reduce costs for Indian manufacturers procuring high-quality components from the UK and improve the competitiveness of Indian auto parts in the UK market.’
Welcoming the signing of the India-UK Free Trade Agreement, Harsha Vardhan Agarwal, President, FICCI, said, “The India-UK Free Trade Agreement is not just a trade pact—it’s a bridge to shared prosperity. It brings a new momentum to sectors like FMCG, healthcare, and innovation-driven enterprises. Guided by Prime Minister Modi’s bold and strategic leadership, this milestone reflects India’s growing stature as a global economic force and a trusted partner in progress.”
FICCI has also said the UK-India FTA is amongst the most comprehensive deals signed by India with a developed economy, covering a wide gamut of bilateral economic cooperation areas. The India-UK FTA will cement the deep relations between the two countries and contribute positively to economic growth, employment creation, and long-term prosperity.
