India-UK Trade Deal Makes British Luxury Cars Cheaper

Buyers of imported British luxury cars in India could soon see big price cuts as customs duties on eligible vehicles imported from the UK are slashed with the Comprehensive Economic and Trade Agreement (CETA) between India and the UK slated to come into force on July 15.

The deal has slashed the import duty to 30% from 110% on eligible fully built-up (CBU) petrol and diesel passenger vehicles manufactured in the UK. Industry estimates suggest the move could cut retail prices of eligible models by about 20-25%.

The duty cut is likely to benefit high-end British carmakers including Rolls-Royce Motor Cars, Aston Martin, McLaren Automotive and Jaguar Land Rover. Depending on the model, buyers could save anywhere between Rs 1 crore to Rs 3 crore.

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Import Quota:

However, the concessional duty will be applicable only to a limited number of imports. The lower tariff will be available on a limited basis for up to 10,000 fully imported petrol and diesel passenger vehicles from the UK in the first year under a Tariff Rate Quota (TRQ), according to a notification issued by the Directorate General of Foreign Trade (DGFT). Imports above this quota will continue to be subject to the existing standard customs duty.

The quota will increase incrementally over the next 15 years, while the concessional duty will be further reduced to 10% over the same period.

“No immediate tariff relief has been provided for UK-built electric vehicles. Under the CETA framework, British-made EVs will be eligible for lower import duties only after the fifth year of the agreement, a provision meant to give India’s domestic EV industry more time to build up its competitiveness.

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Trade Impact:

The agreement has already led to price revisions for some of Jaguar Land Rover’s imported flagship models including the Range Rover Sport SV and Range Rover SV. Executives in the industry expect imported CBU vehicles to make up a larger share of the company’s sales in India with the affordability being enhanced by lower prices.

The India-UK CETA is one of India's largest trade agreements with a developed economy. Besides reducing tariffs on British products such as automobiles, the pact also provides duty-free access for nearly all Indian exports to the UK.

According to government data, bilateral trade between India and the UK stood at $25.12 billion in FY26, compared with $23.13 billion in the previous fiscal year. India's imports from the UK rose to $11.68 billion during the period, while British foreign direct investment into India was approximately $1 billion.