UK Car Trade Deal US & India

Two trade deals in one week could save uk car factories and jobs

After what feels like an eternity of bad headlines – factory closures, job cuts, parked-up cars, Brexit chaos, and Trumpian tariffs – we’ve actually got some good news to report. Yes, you heard that right! In a surprising and very welcome turn of events, the UK government has secured not one, but two major trade deals this week: one with India and one with the United States. And for the UK automotive sector, these could be game-changing. Let’s break it down.

The UK-India Free Trade Agreement

After three long years of back-and-forth negotiations (yep, this one actually started under the Conservatives), the UK and India have finally signed a comprehensive Free Trade Agreement.

What’s in it for the car industry?

Well, how about this: tariffs on British-made cars exported to India – which previously sat at an eye-watering 100% – have now been slashed to just 10% for a quota of 22,000 higher-value electric vehicles.

That’s huge.

And it means a Range Rover Sport that might have cost ₹1.45 crore (about £145,000) in India, could now drop to around ₹80 lakh (roughly £80,000). That’s a £65,000 saving – or 45% less.

Same deal for Bentley, Rolls-Royce, and Aston Martin. We’re talking hundreds of thousands of pounds sliced off sticker prices. For India’s booming middle and upper classes, this suddenly puts luxury British cars within reach.

And don’t forget – Jaguar Land Rover is owned by Tata. So yes, Indian-owned British-built cars are now going to be cheaper to buy in India. It’s come full circle.

The UK-US Trade Deal – A Qualified Win

Just days after the India deal was announced, news dropped that the UK has also struck a new agreement with the United States.

Tariffs on British car exports to the US have been reduced from 27.5% to 10% – but only for the first 100,000 vehicles per year. Anything above that still gets hit with the full whack.

However, let’s do the maths. If UK manufacturers hit their 120,000 target this year, the extra 20,000 vehicles would still face the higher tariff — but when you average that over the whole volume, it’s much more manageable. Most carmakers can absorb it without pushing up prices too much. In fact, some of the high-end marques like Rolls-Royce have said they’ll pass it on to their wealthy customers, who probably won’t flinch at an extra few grand.

And let’s not forget: this deal also includes zero tariffs on steel and aluminium exports, which is a big plus for car manufacturing supply chains.

So, What About Cars Coming Into the UK?

This is where it gets interesting.

The UK has agreed to remove 99% of tariffs on Indian goods, including automotive and EVs. That opens the door for Indian manufacturers to bring their wares to the UK market.

We could see:

• Mahindra bringing in sleek, high-spec electric SUVs like the BE.06 and XUV 9e, priced between £25K and £40K.
• Maruti-Suzuki ramping up exports of hatchbacks like the Swift, potentially landing under £15K – which would be very welcome right now.
• Tata shipping over more EVs and compact SUVs.

And yes, they’re talking about exporting 30,000 Swifts annually. That’s no small thing.

Also, can we get the 5-door Jimny over here, Suzuki? Please drop that K15B lump and slot in the BoosterJet mild hybrid. Thank you kindly.

A Bit of History Repeating?

This isn’t the first time British and Indian car industries have been intertwined.

Remember the Hindustan Ambassador? It was basically a Morris Oxford, and it ruled Indian roads for decades. We’ve also had the Standard Herald, Gazel, Contessa (based on the Vauxhall Victor), and even the Rover SD1 (rebadged as the Standard 2000) assembled in India.

So we’ve been here before. What’s old is new again.

So, Is It All Good News?

Yes… with a little asterisk.

• India Deal: Definitely a big win – especially long-term as tariffs continue to drop over the next 10 years.
• US Deal: Better than nothing, not as good as it was pre-Trump (we used to pay just 2.5% with no quota), but it’s a relief from the recent 27.5% chaos.

So in a nutshell, we’re still worse off than we were before, but we’re now in a much better position than we could’ve been. And in this economic climate, that’s reason enough to celebrate.

Final Thoughts

This week has felt like a rare bit of sunshine breaking through the clouds over the UK car industry.

Will it save factories? Possibly.
Will it protect jobs? Likely.
Will it bring prices down? That’s the hope.

It’s not perfect, but it’s progress. And after the year we’ve had – I’ll take that.

What do you think?

Will Indian EVs tempt you? Are we about to see a British car export revival? Let me know in the comments, and don’t forget to check out the full video on YouTube.

Oh, and don’t forget to grab my books, support me on Ko-fi or Patreon, and keep it locked right here for more motoring madness from your mate, BrownCarGuy.

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