India’s Auto Duty Concessions Under UK FTA Come With Fine Print

Image Source : The Economic Times

India’s free trade agreement with the UK includes carefully structured duty concessions for the auto sector, ensuring a balance between market liberalization and domestic industry protection.

Key Aspects Of The Agreement

- Import duties on vehicles will be gradually reduced from over 100 percent to 10 percent, but only within specific quotas.

- The concessions are tied to engine capacity and vehicle price, ensuring that high-end luxury imports do not flood the Indian market.

- The duty reductions will be phased over 10 to 15 years, allowing Indian manufacturers time to adapt to increased competition.

- Safeguard clauses have been included, enabling India to reinstate higher duties if imports surge unexpectedly.

Impact On The Auto Industry

- Tata Motors and its UK-based subsidiary Jaguar Land Rover are expected to benefit significantly from the agreement.

- Luxury carmakers like Mercedes-Benz and BMW have welcomed the FTA but noted that it may not lead to substantial price reductions for high-end models.

- The agreement aims to double bilateral trade between India and the UK to 120 billion dollars by 2030.

Looking Ahead

- The structured approach to duty concessions reflects India’s cautious stance on auto import liberalization.

- Industry analysts believe the agreement will encourage more affordable imports while protecting domestic manufacturers.

- The long transition period ensures that Indian automakers have time to strengthen their market position before facing increased competition.

Sources: Economic Times, Times Now, Business Standard, MSN.