India-UK Trade Pact: Boosting Auto Industry Relations

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India has introduced duty concessions to UK auto exporters under a new trade pact. The concessions focus on large petrol, diesel, and high-priced electric vehicles while protecting its domestic automotive sector, particularly mid-range and small cars, as well as budget-friendly EVs.

The Comprehensive Economic and Trade Agreement, signed in London by Prime Minister Narendra Modi and UK Prime Minister Keir Starmer, outlines a phased reduction of import tariffs. Current import duties of around 110% will decrease to 10% under specific quotas, primarily benefiting vehicles with larger engine capacities.

This agreement marks India’s first auto tariff concession in any free trade agreement (FTA) and could set a precedent. It may inspire similar requests from other nations like Japan and the EU. The pact is expected to enhance market access for high-end British automotive brands, including those owned by Tata Motors, while maintaining protective measures for India’s small and mid-size automotive industry segments.

📚 Reading Comprehension Quiz

10 Points

Under the new trade pact between India and the UK, what type of vehicles are primarily benefiting from reduced import tariffs?

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October 8, 2025

A. Small and mid-range cars B. High-end electric vehicles C. Budget-friendly petrol and diesel vehicles D. Large petrol, diesel, and high-priced electric vehicles

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