No Tariff Cuts For British EVs In India For First 5 Years Under FTA; Details Inside

For higher-end vehicles priced above £80,000, India will lower tariffs to 40 per cent starting in the sixth year, with a gradual tapering to 10 per cent by the end of the 15.5-year timeline

While the initial phase of the deal excludes all eco-friendly passenger vehicles from tariff cuts, concessions will begin to phase in from the sixth year onward

Source : ANI

The Free Trade Agreement (FTA) signed between India and the United Kingdom on Thursday does not include any immediate tariff relief for British electric, hybrid, or hydrogen-powered passenger vehicles priced below £40,000 on a CIF (Cost, Insurance, and Freight) basis. According to official documents released by the UK government, these categories will remain subject to full import duties for at least the first five years after the agreement takes effect.

While the initial phase of the deal excludes all eco-friendly passenger vehicles from tariff cuts, concessions will begin to phase in from the sixth year onward. British EVs, hybrids, and hydrogen cars with CIF values between £40,000 and £80,000 will see a gradual reduction in import duties, eventually dropping to 10 per cent over a period of 15.5 years.

For higher-end vehicles priced above £80,000, India will lower tariffs to 40 per cent starting in the sixth year, with a gradual tapering to 10 per cent by the end of the 15.5-year timeline.

Indian EVs Gain Limited Access To The UK Market

In a reciprocal arrangement, Indian electric, hybrid, and hydrogen vehicles with CIF values below £20,000, as well as those priced between £20,000 and £80,000, will be eligible for tariff-free access to the UK—but only under a Tariff Rate Quota (TRQ) system.

Starting in the sixth year, the UK will eliminate tariffs on 17,800 Indian vehicles falling within these price brackets. This quota will expand over time, reaching 88,000 vehicles by the 15.5-year mark. However, Indian vehicles priced above £80,000 will not benefit from any tariff concessions under the new agreement.

FTA Broader In Scope, But Selective On Green Mobility

The trade pact, signed during Prime Minister Narendra Modi’s recent visit to the UK, includes significant tariff reductions on other products such as textiles, whisky, and combustion-engine cars. Yet the agreement’s treatment of electric and hybrid vehicles on both sides reflects a cautious approach to liberalising trade in emerging green mobility sectors.

While the deal unlocks new opportunities in traditional automotive and industrial segments, electric and sustainable vehicles will remain highly protected in the short to medium term, with any meaningful liberalisation set to take more than a decade.