India–UK FTA: Why Did The Trade Deal Leave Out Affordable Electric Cars? | Car News

India–UK FTA: Why Did The Trade Deal Leave Out Affordable Electric Cars?

India’s landmark Free Trade Agreement (FTA) with the UK will not grant import duty concessions to most electric vehicles for at least the next five years. While the deal promises gradual tariff reductions for luxury cars and premium electric vehicles, it draws a clear line when it comes to budget-friendly EVs, especially those priced under £40,000, which make up the bulk of mass-market offerings in the UK.

Under the phased plan, India will slash its steep import duties, currently hovering around 110%, down to 10% over five years. But these reductions largely target large petrol and diesel cars and high-value EVs. It’s only from the sixth year that electric, hybrid, and hydrogen-powered vehicles start to benefit, and only if they fall in the high-end bracket.

Cars priced between £40,000 and £80,000 will see duties fall to 50% in the sixth year, then gradually drop to 10% by the tenth year, depending on how many units are brought in under the quota. For luxury EVs over £80,000, full concessions will also kick in from year six.

The main aim behind this cautious roll-out is to shield India’s small and mid-sized vehicle market from an influx of cheaper imports that could undercut domestic players. By restricting concessions to luxury models and limiting the total number of vehicles that can be imported under this regime to 37,000 units over 15 years, the government hopes to give local manufacturers room to strengthen their hold on the fast-growing electric segment.

On the flip side, India has secured expanded market access for its own auto exports to the UK, reportedly four times the scale of the duty cuts it is granting. This is expected to open new doors for Indian automakers, particularly for premium models and the emerging EV category.

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