How Jaguar, Land Rover, Rolls Royce, Bentley lost quite a bit of shine ahead of India-UK FTA

In the lead-up to the India-UK FTA, the luxury car market saw a lot of certainty that led to a decline in bookings after the provisions of the CETA, cleared by the Cabinet a few days ahead of the deal, showed that the current hefty import duty on cars will reduce from 75-125% to just 10%, ToI reported on July 24.

Luxury car brands such as Jaguar, Land Rover, Rolls Royce, and Bentley, which are popular in India, saw a marked shift in customer behaviour as the deal drew near. Following the announcement of the trade deal in May, many affluent buyers chose to hold off on their orders or even cancel them entirely, hoping to benefit from the anticipated lower import duties, ToI's report (by Pankaj Doval) said.

A dealer from a prominent luxury brand told ToI that customers delayed bookings despite orders being placed with manufacturers. He warned that this trend could tarnish India's reputation in the luxury market, as brands often limit production to maintain exclusivity, potentially shifting focus to other markets.


The uncertainty surrounding the timeline for the implementation of reduced import duties contributed to these delays. This lack of clarity caused significant financial strain for dealers. The same dealer pointed out that while buyers are eager for lower prices, the process of duty reduction might not be straightforward. He emphasised that it could take time before any reductions are realised, possibly occurring in stages over several years.

While the initial rush to postpone orders was significant, the situation appeared to stabilise later as dealers communicate more detailed information to customers.

Another dealer told the newspaper that prospective buyers were informed that waiting for a reduction in duties might not be advantageous.

The trade deal is expected to take approximately a year to implement fully, meaning any reduction in duties would not be immediate. Furthermore, luxury vehicle prices typically increase by about 5% annually, alongside rising costs associated with currency fluctuations.

In a nutshell, while the CETA promises a more favourable import duty landscape for luxury cars, the current hesitance among high-end buyers poses challenges for dealers. With the potential for increased prices and the gradual implementation of duty reductions, customers may need to reconsider their waiting strategies.

The coming months will be crucial for the luxury car industry as it navigates these changes.