TL;DR
The India-UK CETA, effective July 15, 2026, will significantly reduce import duties on UK-made automobiles and foster investment, while providing preferential market access for Indian EVs in the UK.
The India-UK Comprehensive Economic and Trade Agreement (CETA), which became effective on July 15, 2026, marks a pivotal moment for India's automotive and electric vehicle (EV) sectors. This landmark free trade agreement aims to eliminate customs duties on a wide range of products, significantly boosting both exports and foreign investment. It encourages UK companies to invest in India through supply chains and manufacturing facilities, fostering a more integrated automotive market.
Under CETA, India has agreed to substantially reduce import duties on fully-built cars and trucks from the UK, a first for a free trade agreement. Tariffs on UK-made passenger cars will decrease from 110% to 10% in a phased manner. Conventional-engine passenger cars will receive duty concessions immediately, while electric, hybrid, and hydrogen-powered passenger vehicles will become eligible for preferential access from the sixth year, providing a five-year protection window for domestic EV manufacturers. India has also invited applications for 2026 import quotas for fully-built passenger cars and goods vehicles under these duty concession provisions.
