India and the United Kingdom signed off on a long-negotiated free trade agreement (FTA) on May 6, marking the end of three years of back-and-forth. While the deal opens doors for multiple industries, the Indian auto component sector is watching closely—optimistic about fresh opportunities, but wary of the UK’s shrinking automotive output.
Shradha Suri Marwah, president of the Automotive Component Manufacturers Association of India (ACMA), called the agreement a “new chapter for bilateral trade and investment.” She added that it could pave the way for stronger technology partnerships and wider market access for Indian suppliers.
India’s auto component exports stood at $21.2 billion in FY24, according to ACMA data. Of that, around 3%—approximately $636 million—was shipped to the UK. In the first half of FY25, exports are already up by 7% year-on-year, with about $11.1 billion worth of goods sent abroad. The share to the UK remains at around 3%, suggesting stable trade links despite the UK's local production slump.
The US remains India’s top buyer for auto components, while the UK accounts for a smaller slice. But India’s footprint in the British car scene isn’t insignificant—Tata Motors owns Jaguar Land Rover, a major player in the UK automotive market.
Despite the promise of tariff-free trade, observers aren’t popping champagne just yet. The UK’s auto production has been in steady decline, hitting its lowest point since 1954 last year. According to the Society of Motor Manufacturers and Traders (SMMT), only 780,000 cars rolled off British assembly lines in 2023—a 15% drop from the previous year.
Industry watchers cite several issues: low consumer demand, ongoing geopolitical uncertainty in Europe, disruptions in global supply chains, and a turbulent shift towards electric vehicles.
Major UK-based automotive brands like Mini, Aston Martin, and Vauxhall (under Stellantis) are all facing headwinds as the sector undergoes a structural shift.
