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UK-India FTA talks centered on mid-range Electric Vehicles market access
Industry News- Nov 09,23
The British government is determined to gain access to India’s mid-priced EV market, particularly in the $40,000-$60,000 (Rs 33.30-49.9 lakh) range.
Talks surrounding a free trade agreement (FTA) between the UK and India have shifted focus to electric vehicles (EVs), according to insiders. The British government is determined to gain access to India’s mid-priced EV market, particularly in the $40,000-$60,000 (Rs 33.30-49.9 lakh) range. Surprisingly, the UK is seeking duty exemptions for fully built EVs in this segment, even though India initially excluded EVs from concessions. India, however, is willing to grant concessions only for luxury EVs priced at $90,000 and above, citing concerns about revenue loss and the need to protect domestic manufacturers.
Currently, the Indian market for premium EVs is limited due to high import duties, with only a few models like Hyundai’s Ioniq 5, Kia’s EV6, and the BYD Atto 3 falling into this category. However, the market is expected to expand significantly with the upcoming launch of new EV models by Tata Motors and Mahindra & Mahindra starting in late 2024.
In the fiscal year 2024, EVs accounted for 1.6% of the Indian passenger vehicle market, amounting to just over 43,500 units. The talks between the UK and India have been prolonged due to the differing positions of the two sides. The UK emphasises the importance of accessing the $40,000-$60,000 price range for its auto industry in India, while India is concerned about potential revenue losses and the need to safeguard domestic manufacturers.
PB Balaji, the Group Chief Financial Officer of Tata Motors, expressed support for a free trade agreement between India and the UK. He stressed the need for these agreements to protect domestic industries in terms of pricing support and welcomed healthy competition in the market. Balaji highlighted the importance of balancing the interests of both countries and ensuring a thriving domestic manufacturing setup.
In addition to British carmakers like Jaguar Land Rover, Aston Martin, Mini Cooper, and Bentley, several non-UK manufacturers like Toyota, Nissan, Honda, and Volkswagen have significant manufacturing operations in the UK and sell their products in the Indian market. Lotus, a British performance carmaker, is also expected to announce its entry into India, potentially benefiting from the free trade deal by launching an electric SUV in the country.
Source: Mint
UK-India FTA
Electric Vehicles Market Access
Mid-Range EVs
Trade Talks
India
UK
Tata Motors
Jaguar Land Rover
Hyundai’s Ioniq 5
Kia’s EV6
BYD Atto 3
PB Balaji
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