India-UK Free Trade Agreement: Luxury Cars Like Rolls Royce, Defender at Half Price

After years of talks, India-UK Free Trade Agreement have finally signed a Free Trade Agreement (FTA) that’s set to shake things up, especially for car lovers.

This deal slashes import and export duties on 99% of goods traded between the two nations, making British luxury cars like Rolls-Royce, Bentley and Aston Martin much more affordable in India.

India-UK Free Trade Agreement

The journey to this FTA began nearly four years ago in May 2021, when India’s Prime Minister and the UK’s then-Prime Minister Boris Johnson met online to discuss boosting trade. By January 2022, India’s Commerce Minister Piyush Goyal and the UK’s Trade Minister laid the foundation for the agreement.

Over 14 rounds of tough negotiations, both countries pushed their demands—India wanted easier access for its IT and healthcare workers to the UK, while the UK sought lower import duties on its cars and whisky. Despite challenges, including four UK prime ministers changing in four years, the deal was finalized after a key meeting at the G20 summit, with implementation expected within months.

Luxury Cars at Half the Price?

The biggest highlight for Indian car enthusiasts is the massive cut in import duties on British cars. Currently, cars imported from the UK face a hefty 100% duty, making them two to three times more expensive in India. Under the FTA, this will drop to just 10% over the next decade, with a quota system limiting the number of cars eligible for the reduced rate.

For example, a Bentley Flying Spur, now priced at ₹5.25 crore in India, could cost around ₹3 crore, saving buyers ₹2 crore. A Rolls-Royce Phantom, which costs ₹10 crore, might drop to ₹5.5 crore, while an Aston Martin DB12 could go from ₹4.5 crore to ₹3.2 crore. Even McLaren’s 750S, priced at ₹6 crore, could fall to ₹3.8 crore. However, brands like Land Rover may not see big changes, as many of their cars, like the Defender, are made in Slovakia, not the UK.

Car Model	Old Price → New Price
Bentley Flying Spur	₹5.25 Cr → ₹3 Cr
Rolls-Royce Phantom	₹10 Cr → ₹5.5 Cr
Aston Martin DB12	₹4.5 Cr → ₹3.2 Cr
McLaren 750S	₹6 Cr → ₹3.8 Cr
Land Rover Defender	₹95 L → No major change

Benefits Beyond Cars

The FTA isn’t just about cars. Indian IT and healthcare professionals heading to the UK will be exempt from social security contributions for three years, making it easier for them to work and send money home. Indian companies will also find it simpler to export goods to the UK with zero duties on 99% of products.

On the flip side, UK companies can now bid for Indian government tenders, boosting collaboration in infrastructure projects. Whisky lovers will cheer too, as import duties on UK whisky will drop from 150% to 75%, eventually hitting 40%.

Challenges for Indian Carmakers

While the FTA is exciting for buyers, it’s a mixed bag for Indian carmakers like Tata and Mahindra. Lower duties could flood the market with British-made cars, even from non-UK brands like Toyota or BMW, if produced in the UK. This might hurt local manufacturers. However, the deal also opens the UK market for Indian cars, so you might soon see Tata Harrier or Mahindra XUV700 on London streets. Still, some worry that global carmakers may skip setting up factories in India, opting to import from their UK plants instead.

This FTA is a bold step toward stronger India-UK ties, promising cheaper luxury cars, better trade, and new opportunities. But it also raises questions about balancing local industry growth with global competition.