The recent trade deal between the UK and India has sparked mixed reactions within the British automotive industry. While some are disappointed with the high import tariffs on UK car exports to India, others see this as an opportunity to tap into the third largest automotive market in the world.
According to the Financial Times, the agreement will initially impose import tariffs as high as 50% on UK car exports to India, with the tariffs not dropping to 10% until 2031. There will also be a quota or sales volume cap in place, along with standard duties on finished vehicle imports. Despite these challenges, there is optimism within the industry about the opportunities that this deal presents.
Jaguar Land Rover (JLR), owned by Tata Motors, has expressed positivity towards the trade agreement. A spokesperson from JLR stated that they welcome the free trade agreement between the UK and India, as it will eventually lead to reduced tariff access for JLR’s luxury vehicles in the Indian market. JLR already assembles a significant portion of its vehicles in India, with plans for future growth opportunities in the country.
Mike Hawes, the chief executive of the Society of Motor Manufacturers and Traders (SMMT), acknowledged the necessary compromises in the trade deal but emphasized the commercial opportunities it brings for UK manufacturers. He highlighted the reduced tariffs on internal combustion vehicles from day one and the potential for lower tariffs on electrified vehicles and parts in the long term.
GlobalData analyst Jonathon Poskitt also pointed out the opportunities for UK vehicle makers to optimize their production and localisation strategies in India under the new trade arrangements. He emphasized the growth potential in the Indian market, especially for premium and luxury products.
Overall, while the trade deal may come with some challenges, there is a consensus within the industry that it opens up new avenues for UK companies in the Indian automotive market. With strategic planning and a focus on local production, UK manufacturers can leverage the opportunities presented by this trade agreement.
