FTA lowers duties on high-end imports, shields domestic players

The India-UK Free Trade Agreement (FTA) is set to sharply reduce the price tags of ultra-luxury imported cars, but with a calibrated structure that protects domestic automakers, smaller vehicles, and emerging technologies like electric vehicles.

- NITIN KUMAR

Under the deal, import duties on high-end internal combustion engine (ICE) cars will be cut from 110% to 30% in the first year, bringing down the price of a ₹5 crore fully built luxury car to around ₹3 crore.

By the fifth year, as tariffs fall further to 10%, the same car could retail at just around ₹2.62 crore.

As earlier reported, the agreement specifically targets top-end ICE vehicles, meaning petrol engines above 3,000cc and diesel above 2,500cc, leaving out lower-capacity cars, EVs, hybrids, and hydrogen-powered models for the first five years.

This would enable British luxury brands better access to Indian buyers while insulating the domestic car market from immediate disruption.

Among the main beneficiaries are British brands like Jaguar Land Rover (JLR), Rolls-Royce, Aston Martin, Bentley, Lotus, McLaren, and MINI, brands long associated with steep prices in the country due to very high import duties.