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The recently concluded India-UK Free Trade Agreement (FTA) is poised to give a significant boost to India’s automotive sector, opening up fresh avenues for exports, investment, and technology collaboration. With tariff barriers set to ease and supply chain integration expected to deepen, Indian automakers are gearing up to tap into the UK and wider European markets.
The deal opens up massive export opportunities for labour-intensive industries and key sectors such as engineering goods, auto parts and engines, and organic chemicals, the Indian government said in a press release.
“India will gain from tariff elimination on about 99% of the tariff lines, covering almost 100% of the trade value, offering huge opportunities for an increase in bilateral trade between India and the UK,” the release stated.
Meanwhile, the UK government noted that Indian automotive tariffs will drop from over 100% to 10% under the FTA. Quotas will be established for automobile imports on both sides, it added.
In 2024, India imported motor cars worth ₹650 crore from the UK. Its motorcycle imports stood at ₹30 crore, and auto parts imports at ₹1,150 crore, according to the government website. Among passenger vehicle makers, major companies selling to India include JLR, BMW, Mercedes-Benz, Rolls-Royce, Aston Martin, and Bentley. JLR accounted for imports worth over ₹500 crore.
On the exports front, tractors worth ₹70 crore, motorcycles worth ₹50 crore, and auto parts worth ₹1,590 crore were exported to the UK in 2024.
Major automotive players such as Mahindra & Mahindra, TVS Motor Company, and Tata Motors have already rolled out expansion plans to ride this wave of opportunity.
Mahindra has announced its intent to export its born-electric vehicles – the BE 6 and XUV 9e – to right-hand-drive markets like the UK first, and subsequently to left-hand-drive markets. These vehicles, part of Mahindra’s next-gen electric platform, are expected to benefit from reduced tariffs under the FTA with the UK.
In a recent press conference, Mahindra’s Executive Director and CEO of the Auto and Farm Sectors, Rajesh Jejurikar, said, “We do have a plan to go to the EU with our electric vehicles at some point in the future, but that will be in a calibrated way. We will do right-hand-drive EVs first and then move to left-hand-drive. So, we are a while away, and of course, based on what gets negotiated through the EU agreement, it will facilitate us to Make in India for the world.”
“Born-electric vehicles are developed for global markets. In the EV world, you don’t have to be a brand for 30 years for consumers to accept you. The acceptance of new brands is going to be totally different,” Jejurikar added in an earlier conversation.
Meanwhile, TVS Motor Company plans to manufacture its British motorcycle brand, Norton, in Hosur, Tamil Nadu. The move signals a shift in high-end manufacturing from the UK to India, with finished models set for global distribution. TVS Managing Director Sudarshan Venu welcomed the agreement, saying:
“We applaud our Prime Minister’s vision to enhance India’s trade links globally. It creates large opportunities for Indian companies like ours to expand further and access new markets. We really appreciate the effort taken by the government to make this historic India-UK Free Trade Agreement. Our British brand Norton will launch later this year, and this agreement will help us scale faster and leverage common supply chains. We are excited as we further progress towards Viksit Bharat.”
Adding to the momentum, Jaguar Land Rover (JLR), the British luxury car brand owned by Tata Motors, is setting up a new facility in Ranipet, Tamil Nadu. The plant will play a crucial role in the company’s long-term India-UK supply strategy and could see the co-development of models for both domestic and international markets.
The FTA ensures comprehensive market access for goods across all sectors, covering all of India’s export interests. India will benefit from tariff elimination on about 99% of tariff lines, covering almost 100% of the trade value, offering vast opportunities to increase bilateral trade with the UK, the government reiterated.
With the global automotive landscape rapidly shifting toward electrification and sustainable mobility, India’s strategic manufacturing edge and skilled labor force position it as a natural hub for EV innovation and exports. The FTA is likely to reinforce this trajectory, catalyzing growth, jobs, and global partnerships.
This article first appeared on Autocar
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