India’s FTA to ease taxes on luxury British cars

Chintan Mehta

13 May 2025, 04:07 PM

5.3K

India and the United Kingdom have come to a historic decision on a Free Trade Agreement (FTA) that will have a profound effect on the automotive industry. The deal yet to get final approval features a groundbreaking provision to reduce import taxes on British made cars by 90%. This development is supposed to make high-end cars of famous British brands offered in India more accessible and affordable.

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Indian Automotive Market: What Are the Implications?

Today the fully imported cars have to face a 100% duty in India. However due to the new trade agreement, these duties will be slashed to a trivial 10%. This shift is expected to reduce the cost of high end British cars such as Rolls-Royce, Mclaren, and Bentley which are mainly sold in India under the completely built unit (CBU) import model.

Such reduction is likely to make these luxury brands more competitive in the Indian market, such that they may become more accessible to more consumers.

Top British Car Models to Get Most Advantage

A number of the models manufactured in Britain and currently being imported into India will be affected by the new lowered duties with a view towards a likely drop in their price by as much as 30-40%. Some of the most popular luxury cars that could receive a lower price can be the following ones:

McLaren GT: Costing ₹3.72 crore now, may go down to about ₹2 crore.
Rolls-Royce Phantom: Presently at ₹9.50 crore, it may slip several crores.
Bentley Flying Spur: At price tag of ₹5.25 crore, could see dramatic price correction.
Aston Martin DB12: Now ₹ 4.59 crore, this can become more affordable.
Mini Cooper SE (Electric): At ₹53.50 lakh, may be reduced to ₹30 lakh or lower.

Such changes are part of a wider trade deal which is set to increase trade between India and the UK by £25.5 billion by 2040.

What about other British Cars?

Some of the British brands like Jaguar and Land Rover are already being assembled in India from within JLR’s facility in Pune. Vehicles such as Range Rover, Discovery Sport and Evoque are produced locally, hence they can enjoy low taxes as a result of assembly. Consequently, the price reductions that might occur to these models may not be the same as the fully imported ones. Nevertheless, they could get the slightest as well as minor changes in the pricing or the availability of additional trims at the same price points.

Impact on British Motorcycle Brands

The FTA will also include benefits for British motorcycle brands which include the likes of Triumph and Norton, two brands that have strategic associations with Indians companies like Bajaj Auto and TVS Motor respectively. These brands might potentially reverse the prices of their premium motorcycles making it more appealing to the traffic jam filled motorcycle market in India.

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Indian Govt

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