Only high-end vehicles to benefit as New Delhi protects local auto, EV, and dairy interests
India will reduce import duties on a limited number of premium vehicles as part of its long-awaited free trade agreement (FTA) with the United Kingdom, a senior UK official confirmed on Tuesday. The lowered tariff will drop from over 100% to just 10% but will apply only to a fixed quota of high-end vehicles, reported timesofindia.indiatimes.com.
No duty cuts for electric vehicles, dairy, or sugar under sensitive sector protections. The agreement, pending final approval from the British Parliament, excludes electric vehicles, which remain protected under India’s green industry policies.
Likewise, there are no tariff reductions on dairy products, a sector India considers politically and economically sensitive. In return, the UK has withheld concessions on sugar and milled rice.
A UK official noted that while this step is a significant breakthrough in bilateral negotiations, there is no current plan to increase the limited quota of cars eligible for the duty cut
The deal reflects a broader balancing act between trade liberalisation and protecting domestic interests, a theme that has defined much of the ongoing India-UK trade dialogue. The senior official stressed that both nations have addressed each other’s core sensitivities in finalising this stage of the pact.