India-UK FTA marks significant step in strengthening country’s global economic engagement: SIAM

The concession framework is designed to provide market access to UK car exporters mostly on large engine size internal combustion engine (ICE) vehicles and high price range electric vehicles (EVs).

The Indian auto industry has welcomed the India–UK Free Trade Agreement (FTA) saying this marks a significant step forward in strengthening country’s global economic engagement, particularly with developed economies.

“The commitments made by the government of India on automobile sector tariffs strike a thoughtful balance—addressing consumer interests while supporting the broader goals of Indian industry,” Shailesh Chandra, President, Society of Indian Automobile Manufacturers (SIAM), said.

Transformative pact

The auto industry body said that concluding this transformative agreement amid global trade uncertainties reflects India’s growing leadership in shaping modern trade and investment frameworks.

“We view this agreement as part of a wider strategic engagement and believe it opens new avenues for collaboration and opportunity with a key global partner,” Chandra said.

The FTA between the two countries, called Comprehensive Economic and Trade Agreement (CETA), will allow British car makers to benefit from a quota reducing the tariff from up to 110 per cent to 10 per cent.

The concession framework is designed to provide market access to UK car exporters mostly on large engine size internal combustion engine (ICE) vehicles (above 3,000 cc petrol / 2,500 cc diesel) and high price range electric vehicles (EVs), while simultaneously protecting sensitive segments of India’s automotive industry (mid and small size engine capacity ICE vehicles and mid and low price range EVs).

It ensures the domestic sector sufficient time to expand, innovate and enhance global competitiveness in India’s area of strength in small (up to 1,500 cc) and mid segment (1,500–3,000 cc petrol/ up to 2,500 cc diesel) cars. Also, there is no concession on duties of super bikes.

“SIAM remains committed to working closely with the government of India to ensure the benefits of the agreement translate into greater growth, global competitiveness and technological progress for the Indian automotive industry,” Chandra added.

Meanwhile, Amit Kalyani, Vice-Chairman and Joint Managing Director, Bharat Forge, said the India-UK FTA marks a breakthrough for India’s engineering and manufacturing industries too, with zero-duty access on about 99 per cent of tariff lines covering almost 100 per cent of trade value.

“Indian manufacturers can now tap into the UK market with greater competitiveness, improving their global footprint. I look forward to seeing the positive impact of this agreement on trade, investment and economic growth in both the countries,” he added.

According to Grant Thornton Bharat, in FY24, India imported passenger vehicles worth around $78.3 million from the UK, a figure expected to rise significantly under the new tariff regime. This will make British luxury brands more accessible to Indian consumers, while maintaining protections for the mass-market segment through price thresholds and origin rules.

“Equally impactful is the FTA’s focus on auto components. In FY24, India exported auto parts worth around $191.6 million to the UK, while imports stood at around $138.6 million. With tariffs on components set to be significantly reduced, Indian manufacturers- particularly those supplying to global OEMs, are well-positioned to expand their footprint in the UK market,” Saket Mehra, Partner, Grant Thornton Bharat, said.

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Published on July 25, 2025

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