The free trade agreement (FTA) finalised between India and the UK early on 6 May will cut tariffs on cars imported from the UK to 10pc from over 100pc earlier under a quota.
The landmark FTA follows several rounds of negotiations between India and the UK that were first launched in January 2022. The import duty cuts are expected to make UK-manufactured cars more affordable for Indian consumers. Cosmetics, whisky and gin exports from the UK will also benefit from tariff reduction, the UK government said.
Tariffs will also be eliminated on 99pc of Indian goods imported into the UK. This is likely to boost exports of auto parts and other goods such as textiles, footwear and gems and jewellery to the UK, according to the Indian government.
Indian exported $21.2bn worth of auto components in the April 2023-March 2024 fiscal year, 32pc of which went to Europe, government data show. "The FTA will be integral in opening new growth avenues and enhancing export potential for auto component and electric vehicle (EV) materials manufacturers," Indian firm Epsilon Carbon managing director Vikram Handa said.
Total trade in goods and services between India and the UK stood at £42.6bn ($56.7bn) in 2024. After the FTA, bilateral trade is expected to increase by £25.5bn each year, according to the UK government.
Non-ferrous metals, metal ores and scrap and mechanical power generators were among the top exported goods from the UK to India last year. For India, refined oil, clothing and telecoms and pharmaceutical products accounted for a major share of exports to the UK. Exports of iron and steel products from India to the UK rose by nearly 70pc on the year to £489.2mn in 2024, UK government data show.
