Synopsis

Imported British luxury car prices will significantly decrease starting July fifteenth. Customs duty on eligible vehicles will fall from 110% to 30% immediately. This reduction is part of the new India-UK trade agreement, which includes a quota system. Luxury car makers anticipate a substantial rise in demand and sales following these changes.

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If you've been waiting to buy a British luxury car, your wait may finally pay off.

From July 15, fully imported models from brands such as Rolls-Royce Motor Cars, Aston Martin, McLaren Automotive and Jaguar Land Rover are expected to become significantly cheaper in India as the India-UK Comprehensive Economic and Trade Agreement (CETA) comes into effect.

Customs duty on eligible fully imported British cars will immediately fall to 30% from 110%, paving the way for price cuts of 20-25%. Depending on the model, buyers could save anywhere between Rs 1 crore and Rs 3 crore, industry executives estimate.

Also Read: India-UK FTA comes into effect today, unlocking duty-free access for Indian exports

Why are prices falling?

The reduction is part of the India-UK trade agreement, which officially comes into force on July 15.

However, the lower duty won't apply to every imported British car. Instead, the government will allow only a fixed number of vehicles to be imported each year at the concessional rate through what's known as a Tariff Rate Quota (TRQ). Once that annual quota is exhausted, any additional imports will attract the regular customs duty.

Under the notification issued by the Directorate General of Foreign Trade (DGFT) on July 9, the concessional duty will initially apply to 10,000 fully built petrol and diesel passenger vehicles imported from the UK in the first year. The quota will gradually increase over the next 15 years, while the concessional customs duty will also be reduced in phases from 30% to 10% over the same period.

Electric vehicles will have to wait a little longer. The notification says British-made EVs will become eligible for concessional import duties only from the fifth year of the agreement, giving Indian EV manufacturers several years of protection before lower-duty imports begin.

Luxury car makers expect demand to rise

While most automakers are yet to announce revised price lists, the industry expects demand to rise sharply once the new duties take effect.

"There will be a substantial revision in prices" of fully imported vehicles, Yadur Kapur, CEO of Select Cars, which represents Rolls-Royce and Aston Martin in India, told ET Bureau.

Although companies are still finalising their pricing, Kapur said customer interest has already surged ahead of the agreement's implementation.

Industry executives expect the lower prices to trigger a doubling of sales in India's high-end imported luxury car segment over the short to medium term, according to ET Bureau.

Jaguar Land Rover has already cut prices of its imported Range Rover Sport SV and Range Rover SV models.

Imported vehicles currently account for about 3-4% of JLR India's sales in India, but that share is expected to rise to 7-10% as lower import duties improve affordability, ET Bureau reported. Buyers have also reportedly postponed purchases while waiting for the trade agreement to take effect.

One of India's biggest trade deals

The India-UK CETA is one of India's most significant trade agreements with a developed economy in recent years and the sixth free trade agreement implemented during the Narendra Modi government's tenure.

The agreement gives duty-free market access to nearly 99% of Indian exports to the UK while lowering tariffs on several British products entering India, including automobiles.

Trade between India and the UK rose 8.62% to $25.12 billion in FY26, compared with $23.13 billion a year earlier. During the same period, India's imports from the UK jumped 36.11% to $11.68 billion, while UK foreign direct investment into India increased to $1 billion, according to government data.