Quick HighlightsLuxury UK cars to see phased duty cuts in India, down to 10% in 5 years.No EV or hybrid import relief for 5 years, then gradual duty reduction starts.Made-in-India EVs, hybrids, and hydrogen vehicles to enter the UK duty-free from year 6.Export quota to the UK will grow fivefold by year 15.No benefits for mass-market EVs under GBP 40,000 (₹46.41 lakh) for import to India.India-UK FTA: Big Boost for EVs, Hybrids and Luxury Car Imports & ExportsIndia and the United Kingdom have officially signed a historic Free Trade Agreement (FTA) , formalized in the presence of Indian Prime Minister Narendra Modi and UK Prime Minister Keir Starmer, along with India’s Commerce Minister Piyush Goyal. The deal promises to reshape the automotive trade landscape between the two nations, especially for electric vehicles (EVs), hybrids, hydrogen-powered cars, and high-end luxury models.What the FTA Means for Car Imports into IndiaA key highlight of this agreement is the phased reduction of tariffs on high-end British vehicles imported into India. Presently taxed at up to 110 percent, these duties will be brought down to just 10 percent over the next five years.This duty relaxation will benefit premium British carmakers like:Aston MartinBentleyMcLarenRolls-RoyceJaguar Land Rover (JLR)These brands stand to gain from increased affordability and market access in India. Mini India, which imports the Cooper from the UK, had already announced a price protection program to pass on the benefits of the FTA to Indian consumers.However, this tariff cut is exclusively for luxury and premium vehicles. Budget or mass-market car segments remain unaffected.EVs, Hybrids and Hydrogen-Powered Cars: A Delayed but Promising OpportunityWhile luxury car tariffs see immediate phased relief, electric and hybrid vehicle import duties will stay at 110 percent for the first five years. From the sixth year onward, the FTA opens the door for 4,400 alternative fuel vehicles (EVs, hybrids, hydrogen-powered cars) to be imported annually at reduced rates ranging from 40% to 50% , depending on the vehicle's total CIF (cost, insurance, freight) value.By the 15th year, the import quota will grow to 22,000 units annually , and the customs duty will fall to just 10% . However, this applies only to vehicles costing over GBP 40,000 (about ₹46.41 lakh). Cheaper EVs and hybrids will not benefit from duty reduction under this agreement.Big Win for Made-in-India EVs and HybridsOne of the most significant aspects of the India-UK FTA is the duty-free export provision for made-in-India EVs, hybrids, and hydrogen-powered vehicles starting from the sixth year . At present, these vehicles attract a 10 percent customs duty in the UK.From the sixth year onwards, 17,600 Indian-made vehicles will be allowed into the UK without any import duty. This quota will expand to 88,000 units annually by the fifteenth year . However, similar to the import rules, the waiver does not apply to Indian EVs priced above GBP 80,000 during this 15-year horizon.The vehicles are categorized into four CIF-based slabs:Under GBP 20,000 (Approx. ₹23.20 lakh )GBP 20,000 – GBP 40,000 ((Approx. ₹23.20 lakh to ₹46.41 lakh )GBP 40,000 – GBP 80,000 (Approx. ₹46.41 lakh to ₹92.83 lakh )Above GBP 80,000 (Approx. ₹92.83 lakh )Which Carmakers Stand to Benefit from This Deal?1. Maruti SuzukiThe e Vitara , manufactured exclusively in India for global markets, currently qualifies for this duty-free export benefit and is the first to directly benefit from the FTA.2. Tata MotorsTata does not currently export EVs to the UK, but the agreement opens up new opportunities for models like the Nexon EV or upcoming premium offerings to enter the British market more competitively.3. MahindraMahindra’s future EVs—such as those under the BE and XUV.e platforms—may also tap into this duty-free corridor if positioned appropriately on the pricing scale.4. Toyota KirloskarWith experience in hybrid technology, Toyota India could consider UK exports of hybrids built locally, particularly smaller series models.Final ThoughtsThe India-UK FTA marks a significant shift in the trade dynamics of clean mobility between two major economies. While immediate benefits are skewed toward high-end vehicle imports, the longer-term outlook strongly favours Indian EV manufacturers with export ambitions. If harnessed well, this deal could position India as a powerful EV production hub not just for the domestic market but for Europe as well.Also Read: New EV Policy Reduces Import Duty From 110% To 15% in India