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Automotive was one of the hardest-fought chapters of the India–UK Comprehensive Economic and Trade Agreement, and the outcome is carefully managed on both sides. For manufacturers and suppliers, the detail matters more than the headline.
UK cars into India
India has agreed to cut its tariff on UK cars from over 100% to 10%, but only for vehicles within an agreed quota. Combustion-engine cars see the first cuts, with tariffs falling to 30% or 50% in the first year depending on engine size. Tariffs on UK electric, hybrid and hydrogen cars begin to fall within six years, also under an annual quota.
For premium UK brands, this makes India a more realistic market. But quota allocation, homologation and dealer networks will shape how much of the opening is used.
Indian EVs into the UK
The opening runs both ways. From six years after entry into force, low- and mid-range electric, hybrid and hydrogen cars from India can enter the UK duty-free within an annual quota. That quota grows over time, reaching 88,000 vehicles in year 15. For Indian manufacturers building EV export capacity, the UK becomes a planned destination rather than a long shot.
The supply-chain opportunity
Beyond finished vehicles, the agreement cuts tariffs on electrical machinery, circuits and conductors. This supports deeper links between UK design and engineering firms and India's fast-growing component base, from battery systems to power electronics. India's production-linked incentives for EV and battery manufacturing add a further reason to locate parts of the supply chain there.
What businesses should do now
- Check whether your vehicles or parts fall within the quota or the general tariff schedule.
- Map the rules of origin for vehicles and components, which can be complex for mixed supply chains.
- Plan homologation and certification early.
- For component makers, assess Indian partners and states with automotive clusters.
Our view
The quota limits the short-term volume of finished cars, but the agreement sends a clear long-term signal. The most durable gains are likely to come from joint ventures and supply-chain partnerships rather than shipments alone. UKISIF can introduce members to state industrial bodies, component manufacturers and investment promotion agencies.
General information only. Sources: HLC briefing, GOV.UK. Related: Advanced Manufacturing · CETA hub