India's Strategic Concessions in the UK Trade Pact

India has crafted a trade agreement with the UK, focusing on concession for large engine vehicles and high-priced EVs, while safeguarding its mid and small automotive sectors. The Comprehensive Economic and Trade Agreement outlines phased duty reductions aimed at fostering competitiveness in India's domestic auto industry.

India has strategically offered duty concessions to UK auto exporters under a new trade agreement focusing on large petrol and diesel vehicles as well as high-priced EVs. The pact, known as the Comprehensive Economic and Trade Agreement (CETA), was signed in London, aiming to protect India's sensitive automotive sectors.

Under this agreement, no concessions will be given to electric, hybrid, and hydrogen vehicles within the first five years. Current automotive import tariffs stand at about 110 per cent but will eventually be reduced to 10 per cent under specific quotas, with duty reductions focusing on categories like those having engines above 3,000 cc for petrol and 2,500 cc for diesel vehicles.

This phased approach allows India to safeguard its domestic auto industry, especially in segments where it excels, such as small and mid-sized vehicles, while ensuring UK automakers gain market access for their high-end vehicles. By Liberalizing trade selectively, the agreement aims to foster growth and maintain competitiveness.