India-UK free trade deal: Cars from Britain to get cheaper

India and the UK on Tuesday announced the conclusion of the free trade agreement (FTA), which will make British cars cheaper in India. The announcement regarding the conclusion of India-UK FTA talks was made by Prime Minister Keir Starmer and his Indian counterpart Narendra Modi. Under the free trade deal between the two countries, cars imported from Britain in India are likely to get significantly cheaper as the automobile tariff will likely fall from the current over 100 per cent to 10 per cent. However, this tax benefit is subject to a quota.

While announcing the FTA, Indian PM Narendra Modi said in a post on X, “In a historic milestone, India and the UK have successfully concluded an ambitious and mutually beneficial Free Trade Agreement, along with a Double Contribution Convention."

While announcing the conclusion of the FTA, the two countries also announced the closing of talks for the Double Contribution Convention Agreement. However, talks on the proposed bilateral investment treaty between the two countries are still on, Reuters has reported. The FTA is expected to double bilateral trade between India and the UK significantly by 2030.

India-UK FTA: Which cars to be cheaper

Some of the most luxurious car brands hail from the UK, including automakers like Jaguar, Land Rover, Rolls-Royce, Aston Martin, Bentley, Mini, etc. Demand for such cars in India has shot up in the past couple of years, with a growing focus on ultra-luxury passenger vehicles, especially from the rich consumers as well as new generation buyers. With the free trade agreement concluded between the two countries, expect the export volume of the cars from the abovementioned automakers in India to shoot up.

The majority of the cars from these brands are imported to India via the Completely Built Unit (CBU) route. Now with the FTA in place, despite the CBU route being followed, the consumers of these cars are likely to pay less than what they used to till date. However, there is a quota for the benefit's availability and the number specified under the quota is yet to be revealed.

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