Rolls-Royce, Land Rover, McLaren, Bentley to get more affordable as India-UK Free Trade Agreement greenlit

Cars and motorcycles made in the United Kingdom are all set to get more accessible in India as both countries have greenlit the India-UK Free Trade Agreement (FTA). Under the new FTA, the tariff on fully imported made-in-UK vehicles will drop from over ‘100 per cent’ to just ‘10 per cent’ under a quota. The India-UK FTA especially benefits British luxury automakers, including Rolls-Royce, Bentley, Jaguar Land Rover, Lotus, Aston Martin, and McLaren, as well as two-wheeler players like BSA (owned by Classic Legends), Norton (owned by TVS) and Triumph Motorcycles.

Rolls-Royce, Bentley, Land Rover, McLaren, Lotus to get more accessible

The move will see a significant price drop on the price of British luxury vehicles in India, which goes into crores. The cars from luxury marque brands are brought to India via the Completely Built-up (CBU) route, which makes the vehicles four times more expensive than their factory pricing. That said, the India-UK FTA has outlined that the zero tariff duty will apply to a limited number of cars and SUVs imported. The finer details of the FTA agreement are yet to be shared with the automakers.

The move will greatly benefit the auto component industry in India with a host of components made in the country for global players. The agreement will also give a boost to other sectors, especially across labour and technology-intensive industries. Moreover, the India-made cars and two-wheelers should also see a spike in volumes being exported to the UK. The move should also make it easier for electric two-wheeler players to set up shop the UK.

Speaking about the successful conclusion of the FTA and the Double Contribution Convention between India and the UK, Sudarshan Venu, Managing Director, TVS Motor Company, said, “We applaud our PM’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."

More opportunity for carmakers

While the UK-based auto brands will be primary beneficiaries, mass players such as Nissan and Toyota could also explore bringing fully built units to India in limited numbers. Both automakers have manufacturing facilities in the UK, and the carmakers could explore bringing select models to India via the CBU route from the UK. The move could also see more Chinese EV players bringing premium products to India. We should hear more from the auto players in the coming weeks as the finer details are clarified.

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