India excludes diamonds, silver, smartphones from UK FTA duty cuts

New Delhi: India has decided not to offer duty concessions to British businesses on a range of sensitive industrial goods, including diamonds, silver, smartphones, and optical fibres, under its free trade agreement (FTA) with the UK, an official stated.

The official further clarified that duty concessions on petrol and diesel engine vehicle imports from the UK are restricted to a predefined quota.

Similarly, the quota for imports of British electric vehicles (EVs) at a concessional rate of customs duty is limited only to "few" thousands.

Sensitive industrial goods like plastics, diamonds, silver, base stations, smartphones, television camera tubes, optical fibres, optical fibre bundles and cables have been kept on the exclusion list of the FTA.

No import duty benefits are given on these goods by India to the UK.

Regarding the automobile sector, an official noted that, as the fourth-largest automobile producer globally, India has the scale and strategic depth to position itself as a global leader in the automotive value chain.

Despite India's strong manufacturing base, its share in the globally traded auto market remains relatively low, presenting significant opportunities for growth and expansion.

The access to the UK market for ICE (internal combustion engine) vehicles has the potential to boost the country's auto and auto components exports.

"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 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 and the UK on Tuesday sealed a landmark free trade agreement that will lower tariffs on 99 per cent of Indian exports and would make it easier for British firms to export whisky, cars and other products to India, besides boosting the overall trade basket. The aim is to double the two-way commerce by 2030 from the present USD 60 billion.

Tariffs on automotive imports will go from over 100 per cent to 10 per cent under quotas on both sides, benefiting companies such as Tata-JLR.

The total electric passenger vehicle retail sales in India grew by 56.87 per cent in April this year to 12,233 units compared to 7,798 units in the same month last year, according to the latest data released by the Federation of Automotive Dealers Associations (FADA).

Tata Motors continued to lead the market with 4,436 units of electric PVs sold last month, although JSW MG Motor India and Mahindra & Mahindra (M&M) are catching up with 3,462 units and 2,979 units, respectively, as per FADA data collated as of May 2 this year.

India's total passenger vehicle imports from the UK were only USD 2.75 million, or 60 units, in 2024.

Most auto manufacturing units in Britain make premium and luxury brands, such as Bentley, BMW, Rolls-Royce, and Aston Martin.

In 2023-24, India's merchandise exports to Britain were USD 12.92 billion, while imports stood at USD 8.41 billion. The trade gap is in favour of India.

(inputs from PTI)