India-UK Free Trade Agreement Opens Doors for EVs, Hybrids, and Hydrogen Vehicles
Key Ideas
- Starting from the 6th year, EVs, hybrids, and hydrogen-powered vehicles from India will be exempt from UK customs duties, benefiting manufacturers like Maruti Suzuki, Toyota, Tata, and Mahindra.
- The customs duty waiver will apply to vehicles under specific price categories, with a quota that increases over 15 years, reaching 88,000 vehicles by the fifteenth year.
- Maruti Suzuki's e Vitara is the initial model eligible for this benefit, with potential for other Indian manufacturers like Toyota, Mahindra, and Tata to expand their presence in the UK market.
- This agreement can facilitate the entry of Indian-made electric vehicles into the UK market, providing opportunities for homegrown companies to establish themselves in a competitive automotive market.
The India-UK Free Trade Agreement is set to have a significant impact on the automotive industry, particularly for electric vehicles (EVs), hybrids, and hydrogen-powered vehicles. Starting from the 6th year of the agreement, vehicles falling into these categories and made in India will be exempted from customs duties when imported into the United Kingdom. This move is expected to benefit major Indian automakers like Maruti Suzuki, Toyota, Tata Motors, and Mahindra.
Under the agreement, the customs duty waiver will be applicable to vehicles based on specific price ranges, with a quota system that gradually increases over a 15-year period, eventually allowing 88,000 vehicles entry into the UK market by the fifteenth year. The waiver, however, does not extend to vehicles above GBP 80,000.
Maruti Suzuki's e Vitara is the first model eligible for this duty cut, leveraging India as its mother plant for global markets including the UK. Additionally, with the development of smaller series hybrid vehicles, the company anticipates further exports to the UK in the future. Other manufacturers like Toyota, Mahindra, and Tata Motors are also poised to benefit from this trade agreement, potentially expanding their presence in the UK market.
The agreement marks a significant opportunity for Indian automakers to strengthen their foothold in the UK, with Tata Motors looking to re-enter a market where its products were previously available. While Mahindra and Tata Motors do not currently export electric vehicles, this agreement opens doors for them to enhance their global reach. The move highlights the potential growth and market penetration opportunities for Indian automakers in the UK, fostering a competitive landscape for the automotive industry.