The Free Trade Agreement (FTA) between India and the United Kingdom will come into effect in India on July 15, following a notification issued by the government. This notification was published by the Directorate General of Trade concerning tariff quotas on vehicles imported from the UK.
Reduction in Prices for Cars and Other Goods
Following the implementation of the FTA, a significant reduction is expected for goods such as cars and whisky imported from the UK. The most substantial price decrease is anticipated for automobiles, potentially reaching up to 80 percent. This will allow consumers to purchase models like Land Rover, Jaguar, Rolls Royce, and Aston Martin at lower prices.
Details of Vehicle Tariffs
Under the terms of the deal, most goods traded between India and the UK will be subject to zero or low tariffs. In the first year, 20,000 vehicles are permitted to be imported with reduced duty. Of these, 10,000 vehicles with engines of 3000cc+ (petrol) and 2500cc+ (diesel) will be imported with a reduced customs duty from 110% to 30%. Additionally, 5,000 vehicles ranging from 1500cc to 3000cc can be imported, with the import duty decreasing from 66% to 50%, followed by a gradual reduction to 10% over 15 years.
Benefits for the Indian Market
The notification also specifies that an additional 2,500 commercial vehicles will be imported in the first year. Regulations regarding quotas for electric vehicles, hybrids, and hydrogen vehicles are planned for introduction starting in the sixth year. Concurrently, goods from India will be exempted from duties when imported into the UK. For instance, textiles, currently subject to a 12% duty in the UK, chemicals at 8%, and basic metals at 10%, will now fall under the '0%' category due to this agreement.
Lowering Costs for Premium Cars and Whisky
Among the vehicles that may become more affordable are premium and super luxury models, including the Land Rover Range Rover, Range Rover Sport, Land Rover Defender, Continental GT, Bentley, Vantage, and DB12, as well as the Rolls-Royce Phantom, Ghost, and Cullinan. The price of these cars could be reduced by up to 80%. Regarding whisky, the current tariff on Scotch whisky in India is 150%. After the FTA comes into force, this tariff will be gradually reduced to 40%, leading to an overall reduction in the price of Scotch whisky to 110%.