UK seeks customs duty cut on electric cars in free-trade talks with India

The UK is pushing for a cut in customs duty on electric vehicles in the ongoing negotiations for signing a free-trade deal with India, a senior official confirmed.

At present there is a customs duty of 60 per cent on imported cars priced below $40,000 while it is 100 per cent on those priced above this point. The UK has suddenly brought in the new proposal on electric vehicles which is not easy for India to concede.

A similar request to cut customs duty on cars was made by US electric vehicle maker Tesla but the government has made it clear that the company must set up manufacturing facilities in India if the company wants to sell its cars in the country. This factor will weigh heavily while considering the UK proposal.

India is keen to protect its own electric vehicle industry which is just beginning to take off and it is not easy to give any duty concessions to foreign companies, sources said.

The negotiations for the UK free-trade agreement were expected to be completed at the end of last year and then have missed an October-end deadline this year. There are at least five chapters of a total of 26, covering sensitive areas such as intellectual property rights, rules of origin, financial services, work visas and tariff cuts on key items that have still to be settled and the talks may stretch into December or even early next year, sources said.

The two countries expect bilateral trade to double to $100 billion by 2030 if the FTA is implemented.