The historic India-UK Free Trade Agreement (FTA) came into existence in July last year. The FTA is now set to take effect in the next couple of weeks, around mid-April. Once implemented, prices of several commodities, including cars, imported from the United Kingdom into India will become significantly more affordable.
Under the FTA, tariffs on fully imported automobiles (petrol above 3000 cc and diesel above 2500 cc) and auto components from the United Kingdom will be reduced from the current 110 percent to 10 percent over a five-year period. In the first year itself, duties are expected to fall to 30 percent.
This phased reduction could lower the prices of fully imported British cars in India by up to 25 percent. However, this figure is likely an upper limit, and the actual price reduction may be lower. The annual quota for this provision has been capped at 20,000 units for the first year under the Comprehensive Economic and Trade Agreement (CETA).
