The new India-UK Free Trade Agreement (FTA) is set to significantly boost exports of ‘made-in-India’ electric vehicles (EVs) and hybrids to the United Kingdom by eliminating customs duties.
Boosting Indian Automotive Exports to the UK
While the India-UK FTA is known for potentially making imported cars more affordable in India, it also offers a massive advantage for vehicles manufactured right here.
Under this agreement, Indian-made electric vehicles, hybrids, and even hydrogen-powered cars will qualify for duty-free entry into the UK. This major benefit is set to kick in from January 1 of the sixth year after the agreement goes live.
Phased Rollout and Vehicle Quotas
The duty waiver will be introduced gradually. Starting from the sixth year, a quota of 17,600 vehicles will be eligible for this customs benefit.
This quota will steadily increase each year, eventually reaching 88,000 vehicles by the fifteenth year of the agreement. It’s important to note that this customs waiver applies only to vehicles valued up to GBP 80,000 (Cost, Insurance, Freight – CIF). Higher-priced vehicles will not be included in this duty-free scheme.
Who Stands to Benefit?
One of the immediate beneficiaries is expected to be Maruti Suzuki with its upcoming e Vitara. India is designated as the global manufacturing hub for the e Vitara, making it a prime candidate for UK exports.
Maruti Suzuki is also developing smaller hybrid vehicles that could leverage this agreement for future exports to the UK. Beyond Maruti Suzuki, other major Indian and international manufacturers with significant operations in India are poised to gain.
Companies like Toyota, Mahindra, and Tata Motors could find new opportunities to expand their presence in the UK market. Although Mahindra and Tata Motors don’t currently export their EVs, this agreement could pave the way for them to re-enter or strengthen their foothold in the British automotive scene.
- Indian-made EVs, hybrids, and hydrogen vehicles will enjoy duty-free import into the UK.
- The benefit begins from the sixth year of the India-UK FTA.
- An initial quota of 17,600 vehicles will expand to 88,000 by year fifteen.
- Vehicles priced above GBP 80,000 will not be eligible for the customs waiver.
- Maruti Suzuki’s e Vitara is a key contender for early export benefits.
- Other major players like Toyota, Mahindra, and Tata Motors are also set to gain.
This trade agreement marks a significant step towards boosting India’s role as a global manufacturing and export hub for sustainable mobility solutions.
