The IndiaUK Free Trade Agreement (FTA) is set to sharply reduce the price tags of ultraluxury imported cars, but with a calibrated structure that protects domestic automakers, smaller vehicles, and emerging technologies like electric vehicles. Under the deal, import duties on highend internal combustion engine (ICE) cars will be cut from 110% to 30% in the first year, bringing down the price of a Rs 5 crore fully built luxury car to around Rs 3 crore. By the fifth year, as tariffs fall further to 10%, the same car could retail at just around Rs 2.62 crore.
As earlier reported, the agreement specifically targets topend ICE vehicles, meaning petrol engines above 3,000cc and diesel above 2,500cc, leaving out lowercapacity cars, EVs, hybrids, and hydrogenpowered models for the first five years. This would enable British luxury brands better access to Indian buyers while insulating the domestic car market from immediate disruption.
Among the main beneficiaries are British brands like Jaguar Land Rover (JLR), RollsRoyce, Aston Martin, Bentley, Lotus, McLaren, and MINI, brands long associated with steep prices in the country due to very high import duties.
“While the highly complex deal confirms some compromises, its entry into force will provide commercial opportunities for UK manufacturers who will be able to access vastly reduced tariffs on internal combustion vehicles from day one, and on electrified vehicles and parts in the longer term,” Mike Hawes, chief executive of the UK’s Society of Motor Manufacturers and Traders (SMMT) said. “To ensure maximum and timely benefit, we now need rapid ratification and renewed efforts to agree fair and workable solutions on tariffratequotas administration,” he added.
Tataowned Jaguar Land Rover is best positioned to gain, though with limits. Most of JLR’s volume sellers, including the Range Rover Evoque, Velar, and Discovery Sport, are locally assembled and won’t qualify for the reduced tariffs. The few special edition models still imported from the UK will be the primary beneficiaries. The Land Rover Defender, which comes from Slovakia, falls outside the FTA scope as the benefits are restricted to direct UK imports.
For JLR’s Range Rover Ranthambore Edition, Masala Edition, Sport SV Edition, and Discovery Metropolitan Edition, currently priced at Rs 4.98 crore, Rs 4.99 crore, Rs 2.95 crore, and Rs 1.47 crore, the revised duties are expected to lower prices to Rs 3.08 crore, Rs 3.09 crore, Rs 1.82 crore, and Rs 91 lakh, respectively. These models account for just 5%–10% of JLR’s overall sales.
A JLR spokesperson said, “We welcome this free trade agreement between the UK and India, which over time will deliver reduced tariff access to the Indian car market for JLR’s luxury vehicles. India is an important market for our British built products and represents significant future growth opportunities”. The spokesperson added that no pricing decisions had been finalised yet.
Other luxury brands will benefit selectively. MINI’s Cooper and Countryman, with engines around 2,000cc, will attract a reduced 50% duty in the first year instead of 30%. Priced today at Rs 45 lakh and Rs 48 lakh, they may come down to around Rs 32 lakh–Rs 35 lakh.
For ultraluxury players like Bentley and Aston Martin, the impact will be deeper. Bentley’s Bentayga, currently in the Rs 4 crore–Rs 6 crore range, could retail between Rs 2.47 crore and Rs 3.72 crore. Aston Martin models like the DB11, Vantage, DB12, DBX, and Vanquish, priced from Rs 3.29 crore to Rs 8.85 crore, could see reductions to as low as Rs 2.04 crore in some cases.
Though these ultraluxury brands sell only about 50 cars a year in India combined, JLR and MINI move over 1,000 units annually. While immediate volumes may not surge, the recalibrated pricing is expected to lead to the longterm growth of the luxury segment.
