How Would a Potential UK/India Free Trade Agreement Benefit UK Automotive Exports?
A Huge Potential Business Opportunity
A UK/India Free Trade Agreement represents a huge potential opportunity for UK automotive exports. It grants UK automakers and automotive export wholesalers access to a country with over 1.3 billion inhabitants, a rapidly growing economy, and a burgeoning middle class. This blog discusses the potential benefits the trade agreement will have on UK automotive exports.
- Increased Access to One of the World’s Biggest Markets
The first thing that springs to mind when we think of a potential UK/India Free Trade Agreement is the increased market access it would provide for wholesale UK automotive exports. The import tariffs India imposes on vehicles range from 60-100%. These tariffs make it difficult for UK automakers to compete in the Indian market as it currently favours Indian vehicle manufacturers. However, a UK/India Free Trade Agreement would eliminate or at least significantly reduce these stringent tariffs and allow UK manufacturers to access a market that is 20 times bigger than their domestic market. - Savings on Import Duties
Implementing an FTA between the UK and India would generate considerable savings on import duties. The reduced tariffs would decrease the costs of importing vehicle parts into India. It would enhance the competitiveness of UK automotive exports and potentially lead to increased sales in the Indian market. Moreover, lower import duties would also make it financially viable for UK automakers to establish regional distribution centres or assembly plants in India, allowing them to further tap into the Indian market while reducing logistical costs. - A Vehicle for Collaboration & Technology Transfer
A UK/India Free Trade Agreement would foster collaboration and technology transfer between UK automakers and their Indian counterparts. India’s rapidly growing automotive sector is becoming a hub for research and development. By establishing closer ties with Indian manufacturers, UK companies can benefit from the progress made in technologies such as electric and autonomous vehicles. We could also imagine collaborative partnerships between both countries’ automakers could lead to joint investments. The shared expertise between automakers can then lead to the development of innovative products tailored to the needs of both markets. - Expanding the Supply Chain
A free trade agreement would create opportunities for UK automakers to expand their supply chains by sourcing automotive components from India. India has a well-established and competitive auto parts industry, offering cost-effective and high-quality components. The integration of Indian suppliers into their global supply chains can contribute to helping UK automakers increase cost-efficiency because they could diversify their supply sources and strengthen their competitiveness in the global vehicle market.
Huge Growth Potential for UK Automotive Exports
A UK/India Free Trade Agreement carries huge potential benefits for the wholesale automotive exports industry. It increases market access, reduces import duties, fosters collaboration, and expands supply chain opportunities. Moreover, such an agreement could enable UK automakers to tap into India’s vast consumer base while enhancing their global competitiveness.