India-UK FTA: New Delhi's auto sector duty concession 'very nuanced'

India’s offer to cut import duties for the auto sector from the UK under the new FTA is “very nuanced” including relaxations and quotas linked to engine capacity and the price of vehicles, a government official said.

The free trade agreement (FTA), which was concluded on May 6, aimed to lower tariffs on 99 per cent of Indian exports to the UK and make it easier for British companies to sell goods like whisky and cars in India. The goal is to double trade between the two countries by 2030 from the current level of $60 billion.

India also included adequate safeguard points in the pact to protect its sensitive sections. For the automobile sector, India has agreed to reduce import duties gradually over a period of 10 to 15 years. Under the agreement, tariffs on car imports will fall from over 100 per cent to about 10 per cent, but only within fixed quotas.

This is expected to benefit companies such as Tata Motors and its British brand Jaguar Land Rover (JLR), PTI reported.

Tata Motors Group CFO PB Balaji earlier said that the agreement augurs well to keep driving JLR’s performance in India as it would benefit future cars and enable customers to access global cars and global prices much faster.

Meanwhile, luxury carmakers like Mercedes-Benz and BMW have also called the deal a positive step, though they said it may not make a big difference to the prices of high-end cars in India.