 "Cars, auto industry")
The BSE Auto index rose 1.74 per cent on Wednesday, driven by stocks like Tata Motors (up by 5.05 per cent), Bharat Forge (up by 5 per cent), Mahindra & Mahindra (up by 1.64 per cent) and TVS Motors (up by 0.5 per cent), as India and the United Kingdom signed the final terms of a free trade agreement (FTA) on May 6 after a three-year negotiation period.
Companies like Tata Motors are set to gain from this as UK-based carmakers will benefit from a quota that reduces tariffs from over 100 per cent now to 10 percent. Further, the auto component industry, which is responsible for over $750 million in exports to the UK, stands to benefit.
Indian access to the UK market for EVs and hybrids is defined under a quota to support the UK auto industry’s complete electric transition, while increasing consumer choice.
Tata Motors declined to comment without a fine-print of the trade deal.
According to analysts, passenger vehicle (PV) players like Tata Motors arm Jaguar Land Rover (JLR), Aston Martin and other European majors import cars worth ₹500 crore annually. This is led by JLR which saw its highest ever sales in India in 2024-25 (FY25) with wholesales of 6,266 units.
Companies like M&M and TVS have plans for the UK market. M&M indicated earlier this week that they plan to export their EVs — BE6 and XEV9e — to right-hand-drive markets in the European Union (EU). The UK is also a right-hand-drive market.
Rajesh Jejurikar, executive director and chief executive officer (CEO) of the auto and farm sectors at M&M, said at the company’s Q4 results conference: “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.”
TVS Motor Company plans to manufacture its British motorcycle brand, Norton, in Hosur, Tamil Nadu. Its managing director (MD) Sudarshan Venu said: “It creates large opportunities for Indian companies like ours to expand further and access new markets…. Our British brand Norton will launch later this year, and this agreement will help us scale faster and leverage common supply chains.”
Analysts also feel that besides importing vehicles at cheaper rates, JLR also stands to benefit from EV exports. While finer details are not known, the upcoming Tamil Nadu plant of the company may play a critical role in EV exports from India.
India exported auto components worth $757 million to the UK in FY24 and it imported $436 mn worth of auto-components, the Automotive Component Manufacturers Association of India (ACMA) said.
ACMA president Shradha Suri Marwah said the deal will significantly enhance market access and technology collaboration in the auto parts industry.
