The new India-UK free trade agreement promises gradual tariff cuts on imported British luxury vehicles like Jaguar Land Rover, but locally assembled models in India will see little immediate price change.
The recent signing of the India-UK free trade agreement (FTA) is seen as a pretty notable milestone for the automotive world, especially for British luxury car brand Jaguar Land Rover (JLR). While folks expect that the agreement will, over time, gradually cut down tariffs on UK-made vehicles coming into India, experts and company insiders are quick to say that the actual impact on JLR's car prices in India will probably be pretty modest—nothing huge right away, at least.
JLR, which is owned by Tata Motors, has always considered India a crucial market for its luxury British vehicles. The company views this FTA as a pathway to lowering tariffs down the line. But here's the thing: around 60 percent of JLR’s sales in India come from vehicles assembled locally—models like the Range Rover, Range Rover Sport, Velar, and Evoque, all produced in Pune through completely knocked down (CKD) operations. So, the tariff reductions that come with the FTA really won’t shake much in terms of the prices for those models. Anurag Singh, an auto industry expert at Primus Partners, pointed out that the real benefits from this agreement are aimed more at the high-end models that are fully imported—like flagship Range Rovers—that currently face hefty import duties. Meanwhile, most of JLR’s sales are from vehicles assembled locally, which already benefit from lower tariffs.
Sources from the industry also mentioned that under this FTA, customs duties on imports will ease up through a quota system. So, tariffs on UK-made cars are expected to fall from over 100 percent to around 10 percent eventually. But, be aware, these reductions aren’t going to happen overnight—they’re scheduled to be phased in, possibly extending all the way to 2031 or even later. Initially, there'll be quotas limiting how many cars can benefit from the lower tariffs—starting at around 20,000 vehicles in the first year and rising to 37,000 by 2031. This effectively puts a cap on the supply of imported vehicles. Luxury brands like Bentley and JLR will face initial tariffs of around 30 percent, which will then decrease gradually in steps.
PB Balaji, Tata Motors’ Group CFO, clarified that while Indian consumers might soon have better access to JLR vehicles at prices closer to global levels—thanks to the FTA—the prices of locally assembled models in India probably won’t change much. They're still waiting to see the detailed terms of the agreement, including the specific quotas and tariff reduction schedules, to fully understand how it might play out.
Meanwhile, JLR is gearing up to start CKD operations at its new plant in Ranipet, Tamil Nadu, early in 2026. This move will make its manufacturing footprint in India even stronger, helping avoid some of the risks associated with tariffs and aligning with India’s ‘Make in India’ push. On another note, JLR has also lowered its projected earnings before interest and taxes (EBIT) for 2026 to between 5 and 7 percent, citing risks like US tariffs, the shift towards electric vehicles, and uncertainties in the Chinese market.
Looking at the bigger picture, the automotive industry in India will likely see mixed signals from this FTA. On one hand, it could open doors for easier export of Indian-made auto components to the UK, boosting the domestic manufacturing sector and supporting government efforts to ramp up local production. Anand Ramanathan, partner at Deloitte South Asia, pointed out that the deal has a dual nature: while it gives Indian consumers access to luxurious British vehicles with fewer tariffs and more quotas, it also means there could be more intense competition hitting local auto makers.
Beyond JLR, other luxury brands like Aston Martin, Rolls-Royce, and McLaren are also expected to benefit from tariff reductions once the phased plan kicks in. For Indian buyers, that might mean much more affordable prices on imported British cars. For example, some reports suggest that a quintessentially British luxury SUV, like the Bentley Bentayga, could see its price nearly cut in half because of the new tariff setup—making high-end British cars a lot more reachable for the growing affluent Indian market.
All in all, while this India-UK FTA probably won't cause a huge shake-up in JLR’s pricing strategy right away, it does carve out a better market access position—especially for fully imported luxury models. Plus, it’s a pretty symbolic move, strengthening economic ties between the two nations, and both Prime Minister Narendra Modi and UK Prime Minister Keir Starmer are framing it as a historic step. Industry watchers will need to keep a close eye on the finer details and phased rollout over time to really figure out what this means for supply chains, prices, and competition in India’s high-end auto market.
Source: Noah Wire Services
