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No duty cuts by India on diamond, smartphones, fibres in UK trade pact
The list of excluded items includes diamonds, silver, smartphones, plastics, base stations, television camera tubes, optical fibres, and cables. These products will not receive any import duty benefits under the trade pact, the official said.
The official also clarified that duty concessions on petrol and diesel vehicles imported from the UK will be limited to a pre-defined quota. A similar quota cap applies to electric vehicle (EV) imports at a concessional customs duty rate, restricted to only a few thousand units.
'No out-of-quota duty reduction for EVs. The sensitivity related to EVs has been taken care of. The out-of-quota duty on ICE [internal combustion engine] vehicles will be reduced gradually over a longer period of time, thereby helping our industries absorb the incremental increase of imports from the UK,' the official added.
India is the world's fourth-largest automobile producer, with a strong manufacturing base. However, its share in global auto exports remains limited. The government believes that improved access to the UK market could boost exports of Indian automobiles and auto components.
The India-UK FTA was finalised on Tuesday. The agreement is set to eliminate or reduce tariffs on 99 per cent of Indian exports to the UK and improve access for British products like whisky and premium cars. The goal is to double bilateral trade from the current $60 billion to $120 billion by 2030.
As part of the agreement, tariffs on automobile imports will be reduced from over 100 per cent to 10 per cent, under quotas on both sides. This is expected to benefit companies like Tata-Jaguar Land Rover.
According to the Federation of Automotive Dealers Associations (Fada), electric passenger vehicle sales in India rose by 56.87 per cent in April 2025 to 12,233 units, up from 7,798 units in April 2024. Tata Motors led the market with 4,436 EV units sold, followed by JSW MG Motor India (3,462 units) and Mahindra & Mahindra (2,979 units).
India imported only 60 passenger vehicles from the UK in 2024, worth $2.75 million. Most auto manufacturing in the UK is focused on luxury brands such as Bentley, Rolls-Royce, BMW, and Aston Martin.
Saurabh Agarwal, Partner & Automotive Tax Leader at EY India, said, 'This deal should really help our auto component makers sell more in the United Kingdom. At the same time, Indian consumers might be able to buy premium cars at the right price point as soon as they are launched globally. It probably won't shake up our Indian car manufacturers too much because most Indian consumers still prefer the more affordable options.'
The FTA also provides India with longer timelines to phase out duties on products like ceramics, petroleum goods, chemicals such as carbon and sulphuric acid, and aircraft engines.
In FY 2023–24, India exported goods worth $12.92 billion to the UK and imported goods worth $8.41 billion, maintaining a trade surplus.
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