India-UK Free Trade Agreement signed during Prime Minister Narendra Modi’s official visit to London will boost Indian auto industry. TVS Motor Company, which acquired the classic British brand Norton Motorcycles, said the deal would “accelerate its ability to access global markets” and its efforts to roll out new Norton bikes later this year.
The new trade accord would have a seismic impact on the automotive trade between the two countries. This opens a huge window of opportunity for Indian manufacturers to penetrate the global supply chain supported by the ‘Make in India’ campaign.”
FTA Slashes Import Duties
There is about 12 per cent reduction in import duties in the case of Indian Auto Makers and about 20 per cent on those of UK, this THE India-UK FTA Key highlight of the India-UK FTA is anticipated to have significant impact on the prices of vehicles.
- The import taxes on cars and motorbikes made in the UK will fall from more than 100% to 10%.
- This cut is effective on Petrol, Diesel and Electric cars based on annual allocation.
- Luxury UK brands such as Rolls-Royce, Bentley and Jaguar Land Rover (JLR) are expected to get a lot cheaper in India.
The move is likely to promote fierce competition in the premium vehicle category and increase imports of cars from the UK. India imported passenger cars valued at around $78.3 million in FY2024 from UK and this is likely to increase under the new tariff regime.
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TVS and Norton: The smart move
The timing of the agreement is crucial for TVS Motor Company as it gears up to launch a new range of Norton motorcycles. Sudarshan Venu, managing director of TVS Motor Company, said the FTA will “unlock new avenues of growth for Indian businesses to take ‘Make in India’ global” and will allow TVS to scale its operation of Norton faster through synergies of common supply chains.
TVS bought Norton Motorcycles in 2020 and has already ploughed money in to creating a new UK factory in Solihull. Norton intends to bring only the first few models of its bikes to India, after which it will set up local manufacturing, which will be supported by this agreement.
The deal is also a win for the auto parts industry. It will push UK businesses to deepen their sourcing from India and, may be, even make domestic manufacturing investments in the country that can leverage India’s production cost competitiveness.