India-UK free trade agreement is going to reshape auto market: Siam

India, UK sign FTA: Automotive tariffs to be halved over 10 years; luxury brands and domestic OEMs alike stand to benefit as India deepens global trade ties

The Society of Indian Automobile Manufacturers (Siam) on Friday welcomed the India-UK Free Trade Agreement (FTA), calling it a strategic breakthrough that aligns consumer interests with the broader goals of the Indian industry. The industry body praised the balanced approach to automotive tariff commitments, highlighting potential gains for both domestic manufacturers and global brands.

 

Siam President Shailesh Chandra said the pact marks “a significant milestone in India’s international economic engagement,” adding that it opens new pathways for collaboration with one of India’s key global allies.

 

“This agreement signals the beginning of a deeper strategic partnership and strengthens India’s positioning in global trade and investment frameworks,” he said.

   

India-UK FTA opens new trade opportunities across industries

The FTA, formally known as the Comprehensive Economic and Trade Agreement (CETA), was signed in London on Thursday in the presence of Prime Minister Narendra Modi and his British counterpart Keir Starmer. It grants duty-free access for a range of Indian exports, including leather goods, electrical machinery, and chemicals, with overall trade opportunities estimated at nearly $23 billion.

 

Luxury car brands, domestic players both stand to gain

For the auto sector, the agreement holds substantial implications. Under the FTA, tariffs on automotive imports will be halved over 10 years for vehicles imported outside of an agreed quota. Chandra noted that this structure was carefully designed to support the domestic manufacturing ecosystem while giving Indian consumers greater access to global products.

 

Luxury carmakers are among the immediate beneficiaries. Jaguar Land Rover (JLR), a Tata Motors-owned brand, stands to gain significantly, with its British heritage and presence in India. JLR currently assembles models such as the Range Rover, Range Rover Sport, Velar, and Evoque at its Pune plant and is preparing to launch local assembly at a new facility in Tamil Nadu by next year.

 

Around 60 per cent of JLR cars sold in India are produced from completely knocked down (CKD) kits, which attract a 15 per cent basic customs duty.

 

The FTA’s tariff relaxations are also expected to create pricing advantages for ultra-luxury brands like Rolls-Royce, McLaren, and Aston Martin, which together sold fewer than 150 vehicles in India over the past two years.

 

Domestic OEMs see export upside: Siam

Chandra emphasised Siam’s ongoing collaboration with the government to maximise the agreement’s impact. “The government’s consultative approach ensured industry voices were heard. This FTA creates the foundation for enhanced growth, competitiveness, and technological advancement,” he said.

 

Domestic manufacturers like Mahindra & Mahindra and Maruti Suzuki, which are actively expanding in European markets, are also set to benefit.

 

(With agency inputs)