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British luxury cars like Jaguar and Rolls-Royce may soon become cheaper in India after a new trade deal slashes import duties.
UK car import tax may drop to 10 per cent, making them cheaper in India.
On July 22, India and the United Kingdom officially concluded their Free Trade Agreement (FTA), which will make luxury British cars more affordable in India. The announcement was made by UK Prime Minister Keir Starmer and Indian Prime Minister Narendra Modi.
Under this deal, the import duty on cars from the UK could drop from over 100 per cent to just 10 per cent, significantly reducing the cost of high-end vehicles. However, this lower tax will only apply to a certain number of cars, as there will be a quota. The exact number of vehicles allowed under this benefit hasn’t been shared yet.
Meanwhile, Prime Minister Narendra Modi shared the news on social media, posting on X (formerly Twitter): “In a historic milestone, India and the UK have successfully concluded an ambitious and mutually beneficial Free Trade Agreement, along with a Double Contribution Convention.”
A new chapter begins today in the India–UK economic partnership! The signing of the Comprehensive Economic and Trade Agreement (CETA) reflects our shared commitment to enhancing trade, driving inclusive growth and creating opportunities for farmers, women, youth, MSMEs, and… pic.twitter.com/FUOo4dkHLU— Narendra Modi (@narendramodi) July 24, 2025
In addition to the FTA, both countries also concluded talks for the Double Contribution Convention Agreement. However, discussions are still ongoing for a proposed bilateral investment treaty, according to Reuters.
The new FTA is expected to significantly boost trade between India and the UK by 2030.
Which British Cars Could Get Cheaper?
The UK is home to some of the world’s most well-known luxury car brands, such as Jaguar, Land Rover, Rolls-Royce, Bentley, Aston Martin, and Mini. Over the past few years, the demand for ultra-luxury vehicles in India has increased, especially among wealthy buyers and younger consumers.
Most of these cars are currently brought into India as Completely Built Units (CBUs), meaning they are fully assembled before arriving. This usually attracts very high import taxes. But with the new FTA in place, even these fully built imported cars will be available at lower prices, although only a limited number will be eligible for the tax cut, based on the quota.
With this agreement, more British cars are expected to enter the Indian market, and consumers may now be able to purchase them at more affordable prices than before. This move could boost luxury car sales and benefit both Indian buyers and UK car manufacturers.
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Delhi, India, India
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