NEW DELHI, 24th July 2025: India’s largest electric vehicle manufacturers, Tata Motors and Mahindra Electric, could be among the early beneficiaries of the recently concluded India-UK free trade agreement (FTA). This agreement reduces tariffs on premium British cars and establishes a structured pathway for Indian electric vehicles (EVs) and components to enter the UK market.
The deal, finalised after years of negotiations, lowers customs duties on electric vehicles from 110% to 10% within a special annual quota of 22,000 units. It also eliminates tariffs on EV components and auto parts while reducing levies on large-engine combustion vehicles, thereby reshaping the economics for Indian and British manufacturers in each other’s markets.
“This agreement is designed to open doors for Indian EVs in the UK while allowing British automakers to access India’s luxury segment,” said a senior official from the Commerce Ministry. “It provides Indian companies like Tata and Mahindra a platform to expand globally without compromising our domestic industry.”
For Tata Motors, which owns Jaguar Land Rover, the FTA facilitates greater integration of its Indian and British EV operations.
It eases the import of premium models into India while providing reciprocal access for Indian-made EVs and components in the UK. Mahindra Electric, planning a significant EV expansion in Europe by 2030, now has a pathway into the UK’s well-established EV ecosystem, opening up opportunities for technology collaborations and access to London’s green capital markets.
“With these concessions, Indian EV firms can compete more evenly in the UK, particularly in high-value electric SUVs and fleet solutions,” noted an auto industry analyst at a Mumbai-based brokerage house
The agreement employs a phased, quota-based approach, allowing the Indian market to import up to 22,000 premium EVs annually, primarily those priced above £80,000 (CIF), while protecting the domestic mass-market segment, where Indian firms are developing their leadership.
India has also secured reciprocal market access in the UK that amounts to four times the concessions it offered, providing a much-needed boost to local manufacturers as they look to expand in Europe. Over the next 15 years, the total combined quota for EVs and large-engine internal combustion engine (ICE) vehicles will increase to 37,000 units, with vehicles priced below £40,000 (CIF) remaining completely protected.
British luxury brands such as Bentley, Rolls-Royce, and Aston Martin are set to benefit immediately. Prices of models like the Bentley Bentayga, which currently retails for over ₹4 crore in India, could decrease by nearly 40%. Premium motorcycles from firms like Triumph, Norton, and BSA will also enjoy significantly lower import duties, enabling them to have a stronger presence in India’s luxury mobility market.
While the FTA’s immediate tariff relief focuses on high-end four-wheelers, it also opens new opportunities for India’s growing two-wheeler EV market. Companies such as Ola Electric, Ather Energy, and TVS could find it easier to access the UK market for exports of scooters and low-speed EVs, especially as London intensifies its urban mobility electrification programs.
For domestic battery manufacturers like Amara Raja and Exide, the agreement presents a chance to establish joint ventures with UK partners in advanced chemistries, recycling, and gigafactory development, helping India ascend the value chain in cell manufacturing and rare-earth magnet production.
The FTA could significantly transform the EV supply chain. India is investing ₹3,500–5,000 crore to expand its rare-earth and magnet ecosystem, while the UK is advancing its circular economy for recycling and urban mining.
“This is a game-changer for EV supply chains,” said Anupam Kumar, CEO of MiniMines, a start-up focused on rare-earth recovery. “Tariff-free access to UK clean-tech inputs and joint R&D in recycling could reduce our dependence on China for critical EV materials.”
The duty reduction to 10% is applicable only within the quota over five years, with out-of-quota duties halved over 10 years, ensuring Indian manufacturers have time to scale up. The Commerce Ministry stated that the framework “balances the twin objectives of global integration and safeguarding sensitive segments of India’s auto industry.”
Industry leaders believe the FTA’s importance extends beyond mere tariffs. Rolls-Royce CEO Tufan Erginbilgic described it as “a landmark in bilateral cooperation,” adding that the deal will expedite joint efforts on power and propulsion technologies across sectors.
If executed effectively, the FTA could represent India’s boldest move yet to leverage trade policy into a launchpad for global EV leadership, offering Tata, Mahindra, and a burgeoning group of clean-tech players more than just tariff relief. It serves as a gateway to one of the world’s most advanced EV markets, unlocking capital, technology, and customers, while signalling that India’s ambitions now extend beyond merely catching up to actively shaping the global electric mobility supply chain on its terms.
