The United Kingdom has announced nearly GBP 6 billion in new investments and export wins tied to the UK-India Free Trade Agreement (FTA), with significant implications for the automotive, aerospace and advanced manufacturing sectors. The deal, signed during UK Prime Minister Keir Starmer’s meeting with Indian Prime Minister Narendra Modi, is expected to create over 2,200 jobs in the UK.

Under the FTA, India’s average tariff on UK products will drop from 15 percent to 3 percent, with specific cuts for key sectors. Automotive tariffs of up to 110 percent will be reduced to 10 percent under a quota system, while aerospace tariffs (previously as high as 11 percent) will be eliminated. Tariffs on electrical machinery will also fall, potentially halved or brought to zero, depending on product classification.

The UK government estimates the trade deal will increase UK exports to India by nearly 60 percent and raise bilateral trade by 39 percent by 2040, compared to current projections without the agreement.

British automotive, aerospace, and advanced manufacturing players are among the biggest beneficiaries:

Rolls-Royce and Airbus will begin delivery of aircraft powered by Rolls-Royce engines to Indian airlines as part of contracts worth around GBP 5 billion. The orders are expected to support jobs in Filton, Broughton, and Derby.

International Aerospace Manufacturing (IAMPL) — a joint venture between Rolls-Royce and Hindustan Aeronautics — is investing GBP 30 million to expand its facility in Hosur, India.

Johnson Matthey will invest GBP 4 million in new plants at Taloja and Panki, supporting up to 20,000 jobs in India during construction, alongside over GBP 20 million in secured contracts for engineering and catalyst supply.

Wilson Power Solutions will invest GBP 21 million in Chennai to expand transformer manufacturing capacity.

Helical Tech is committing GBP 5.72 million in overseas direct investment (ODI) to expand its Pune facility as a global supply hub.

The agreement also unlocks procurement opportunities in India’s clean energy market and improves market access for UK manufacturers across sectors such as components, electrical machinery, and mobility technologies.

On the export front, UK companies such as Carbon Clean, Occuity, Aurionpro, DCube AI, and Kyzer Software are tapping into Indian demand for carbon capture, healthcare tech, AI, and fintech. Combined, their deals are set to contribute hundreds of millions in export value over the next five years.

Jonathan Reynolds, Business and Trade Secretary, UK, said, “The almost GBP 6 billion in new investment and export wins announced today will deliver thousands of jobs and shows the strength of our partnership with India.”

The FTA also paves the way for long-term collaboration in defence manufacturing, semiconductors, AI, quantum computing and other critical technologies.

The UK currently imports GBP 11 billion in goods from India annually. With liberalised tariffs, the government expects significant cost savings for UK firms importing automotive and advanced manufacturing components, aiding domestic production and supporting supply chain resilience.

Shailesh Chandra, President, SIAM and Managing Director, Tata Passenger Vehicles & Tata Passenger Electric Mobility, said, “The Indian automobile industry congratulates the Government of India for its tireless efforts in bringing the India–UK Free Trade Agreement (FTA) to fruition. This landmark development marks a significant step forward in strengthening India’s global economic engagement, particularly with developed economies. As two major economies enter a new phase of partnership, SIAM appreciates the Government’s extensive stakeholder consultations throughout the negotiation process. Concluding this transformative agreement amid global trade uncertainties reflects India’s growing leadership in shaping modern trade and investment frameworks.”

The commitments made by the Government of India on automobile sector tariffs strike a thoughtful balance—addressing consumer interests while supporting the broader goals of Indian industry. We view this agreement as part of a wider strategic engagement and believe it opens new avenues for collaboration and opportunity with a key global partner. SIAM remains committed to working closely with the Government of India to ensure the benefits of the agreement translate into greater growth, global competitiveness, and technological progress for the Indian automotive industry,” added Chandra.

Shradha Suri Marwah, President, ACMA, said, “The Automotive Component Manufacturers Association of India (ACMA) welcomes the signing of the India-UK Comprehensive Trade Agreement as a landmark development in the bilateral relationship between the two nations. This agreement is poised to usher in a new era of economic cooperation, fostering greater market access, technology partnerships and value chain integration between the Indian and British automotive industries. The CETA is expected to benefit the Indian auto component sector through enhanced opportunities for exports, streamlined regulatory processes, particularly in key areas such as electric mobility, precision engineering and lightweight materials. Indian MSMEs, which form the backbone of our industry, stand to gain from the liberalised terms of trade and improved access to UK markets. We are hopeful that the agreement will also promote collaboration in R&D, skilling and innovation, especially in green and digital technologies – areas that are crucial for our sector’s long-term competitiveness and sustainability. ACMA congratulates the government of India and the United Kingdom for their vision and commitment in bringing this agreement to fruition. We look forward to working with our counterparts in the UK to realise the full potential of this partnership, and to strengthen our collective contribution to global automotive value chains.”

Dr Anish Shah, Group CEO and MD, Mahindra Group, said, “The landmark trade agreement between India and the UK marks a transformative moment in the global economic landscape. It’s not just a win for trade, but a blueprint for a modern, values-led partnership that puts innovation, sustainability, and inclusive growth at the heart of global collaboration. At Mahindra, we believe deeply in the power of such cross-border partnerships to unlock economic potential, create high-quality jobs, and accelerate progress in future-facing sectors from green mobility and clean energy to digital technologies and advanced manufacturing. The UK-India Vision 2035 aligns closely with our own strategic priorities building resilient supply chains, investing in frontier technologies, and fostering a just transition to a low-carbon economy. As Indian industry becomes increasingly global in its footprint and ambition, we look forward to contributing meaningfully to this next chapter of UK-India cooperation.”

Sudarshan Venu, Managing Director, TVS Motor Company, said, “We are deeply inspired by Prime Minister Narendra Modi’s vision of Viksit Bharat and his unwavering commitment to making India a global manufacturing and design powerhouse. The signing of the India-UK Free Trade Agreement is a pivotal moment—it opens new frontiers for Indian companies to take ‘Make in India’ to the world. We are particularly excited given the launch of new Norton vehicles this year, which will benefit from the strengthening of trade links between India and the UK. It energises our global ambitions and strengthens our resolve to build world-class products and brands.”

A spokesperson for JLR said: “We welcome this free trade agreement between the UK and India, which over time will deliver reduced tariff access to the Indian car market for JLR's luxury vehicles. India is an important market for our British built products and represents significant future growth opportunities.” 

Amit Kalyani, Vice-Chairman & Joint MD, Bharat Forge, said, “Congratulations to Prime Minister Narendra Modi on the historic India–UK deal signed yesterday! #IndiaUKFTA marks a breakthrough for India’s engineering and manufacturing industries, with zero-duty access on about 99% of tariff lines covering almost 100% of trade value. Indian manufacturers can now tap into the UK market with greater competitiveness, improving their global footprint. I’d like to extend my appreciation to Hon’ble Minister of Commerce and Industry, Piyush Goyal ji for his pivotal roles in facilitating this partnership. I look forward to seeing the positive impact of this agreement on trade, investment, and economic growth in both the countries.”

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German luxury automotive brand BMW India is set to increase prices across its entire model range by up to 3 percent beginning 1 September. The company cites continued foreign exchange impacts and rising material and logistics costs as the primary reasons for the price adjustment.

Vikram Pawah, President and CEO, BMW Group India, said the company has seen significant sales growth in the first half of the year.

“BMW India’s growth and sales momentum in the first half of the year has been remarkable. However, factors like continued forex impact and global supply chain dynamics have been leading to increased material and logistics costs. Our commitment to offer best value and experience throughout customer journey is steadfast. In the festive season, we are geared to introduce several new power-packed profiles of our cars. As the strong demand for BMW’s luxurious, pioneering cars continues, we will deliver exceptional performance and innovation to our valued customers,” he said.

At present, BMW sells the locally produced the BMW 2 Series Gran Coupe, BMW 3 Series Long Wheelbase, BMW 5 Series Long Wheelbase, BMW 7 Series, BMW X1, BMW X3, BMW X5, BMW X7, BMW M340i and BMW iX1 Long Wheelbase.

in India. The company also offers a wide selection of imported models, including the BMW i4, BMW i5, BMW i7, BMW i7 M70, BMW iX, BMW Z4 M40i, BMW M2 Coupe, BMW M4 Competition, BMW M4 CS, BMW M5, BMW M8 Competition Coupe and BMW XM (Plug-in-Hybrid) as completely built-up units (CBU).

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In a joint effort to improve road safety, Skoda Auto Volkswagen India (SAVWIPL) and the SaveLIFE Foundation have successfully completed a two-year project on a high-risk section of National Highway 19 in Uttar Pradesh.

The initiative, named ‘Surakshit Sadkein, Surakshit Bharat’ (Safe Roads, Safe India), has resulted in a 7.5 percent reduction in road crash fatalities on the Agra–Etawah–Chakeri corridor since its launch in November 2022.

The program benefited over 720,000 commuters and focused on a comprehensive, evidence-based approach to road safety, addressing four key areas:

Engineering: Over 7,000 engineering hazards were fixed, with the addition of crash barriers, speed-calming measures and improved pedestrian facilities.

Enforcement: Electronic enforcement tools and new signage were deployed to improve traffic management.

Emergency Care: More than 300 first responders were trained in Basic Trauma Life Support.

Education: Awareness campaigns, including billboards and local outreach, reached a wide audience and commercial vehicle drivers received training in anticipatory driving.

This project was a collaboration with several government bodies, including the National Highways Authority of India (NHAI) and the Uttar Pradesh Police. The partners hope this successful model can be replicated in other high-risk areas across the country.

Piyush Arora, Managing Director & CEO, SAVWIPL, said, “For us, progress in the automotive sector is as much about building safer communities as it is about innovation. The Group takes safety seriously – our Made-in-India models have achieved full 5-star safety ratings, and we are committed to extending that safety beyond our cars to the roads we share. The NH 19 Zero Fatality Corridor with SaveLIFE Foundation shows that when engineering, enforcement, training, and awareness come together, lives are saved. This measurable impact strengthens our vision of a self-reliant India, where independence also means the freedom to travel without fear.”

This is the second Vision Zero Fatality Corridor project supported by SAVWIPL, following the Mumbai–Pune Highway initiative, which achieved a 61 percent reduction in fatalities.

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The Indian automotive industry has again shot back in the green with wholesales of 1.97 million vehicles sold in July 2025, which is 7 percent higher compared to 1.84 million units sold last year. This also marks a 2 percent growth over last month, when a total of 1.93 million vehicles were sold in the country.

Interestingly, the passenger vehicle segment has reported a slight decline with 340,772 units sold, as against 341,510 units sold last for the same period last year. On the other hand, compared to the previous month, the segment clocked a 9 percent growth. SUVs continue to power the segment with a total of 192,763 units sold last month.

The three-wheeler segment, with wholesale of 69,403 units, reported a healthy 17 percent growth YoY and 12 percent growth MoM.

The two-wheeler segment witnessed a total of 1.56 million units being sold last month, which was 9 percent higher compared to last year, but a flat growth over June 2025. While scooter and motorcycle sales grew at 16 percent and 5 percent on a year-on-year basis, respectively, the motorcycle segment witnessed a 10 percent decline over last month.

Going forward, the automotive industry is expecting the healthy monsoon, rural sentiment and the beginning of festival season to drive growth further.

Rajesh Menon, Director General, SIAM said, “All vehicle segments posted stable performance in July 2025, though overall sentiments in the Passenger Vehicles segment has remained subdued so far. Three Wheelers posted their highest ever sales of July in 2025, with a growth of 17.5 percent as compared to July 2024. With the advent of the festive season beginning with Onam festivities in the latter part of August, the Indian auto industry remains cautiously optimistic for the demand momentum to pick up in the coming months.”

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Tata Motors (TML) has announced its financial results for the quarter ending June 30, 2025. The company's consolidated revenue was INR 10,440 billion, a 2.5 percent decrease from the previous year.

The company shared was a challenging quarter for the company, as it was impacted by a decline in volumes across all its businesses and a drop in profitability, particularly at Jaguar Land Rover (JLR).

The consolidated reported a net profit of INR 40.03 billion, which was supported by a sharp reduction in finance costs. The free cash flow for the automotive sector was a negative INR 1,230 billion, primarily due to adverse working capital from seasonality and tariffs.

JLR delivered its 11th consecutive profitable quarter, despite challenging global economic conditions. JLR's revenue was GBP 6.6 billion, a 9.2 percent decrease compared to Q1 FY2025. The company's profitability and cash flow were directly and materially impacted by the application of 27.5 percent US trade tariffs on UK- and EU-produced cars exported to the US. The decrease in profitability was also influenced by foreign exchange headwinds. However, a newly signed UK-US trade deal, effective from 30 June2025, is set to reduce tariffs on UK-produced vehicles exported to the US from 27.5 percent to 10 percent. The EU-US trade deal, announced on 27 July 2025, will also reduce tariffs on JLR’s EU-produced vehicles exported to the US from 27.5 percent to 15 percent. The company's PBT for the quarter was GBP 351 million.

Adrian Mardell, JLR Chief Executive Officer, said, “Thanks to our talented people and the robust foundations we have built at JLR, we delivered an 11th successive profitable quarter amid challenging global economic conditions. We are grateful to the UK and US Governments for delivering at speed the new UK-US trade deal, which will lessen the significant US tariff impact in subsequent quarters, as will, in due course, the EU-US trade deal announced on 27 July 2025. Looking ahead, we remain focused on delivering our transformational Reimagine Strategy, including investing GBP 3.8 billion this financial year to support the development of our next-generation vehicles, including our stunning new electric Range Rover and Jaguar models.”

The Tata Commercial Vehicles (Tata CV) business saw its revenue decrease by 4.7 percent to INR 170 billion. Despite lower volumes, the business maintained double-digit EBITDA margins of 12.2 percent, an improvement of 60 bps. This was a result of better realisations and cost savings. Domestic sales volumes were down by 9 percent YoY, while exports increased by 68 percent. The business reported a net profit of INR 16.17 billion.

Girish Wagh, Executive Director Tata Motors, said, “Q1 FY26 was a challenging quarter for the commercial vehicle industry, with subdued demand across key segments impacting overall performance. We also witnessed a decline in domestic sales volumes, reflecting broader market softness and delayed fleet replacement cycles, while segments like Buses and Vans showed resilience and our International Business delivered growth. Our commitment to product innovation and customer-centricity remained strong. The launch of the Ace Pro mini-truck in multiple powertrain options received encouraging initial market response, reaffirming our focus on delivering relevant and affordable mobility solutions. Despite adverse volumes, the business delivered 12.2 percent EBITDA and healthy ROCE of about 40 percent. The acquisition of IVECO Group is a strategic leap forward in our ambition to build a future-ready commercial vehicle ecosystem. By integrating the strengths of both organisations, we will be unlocking new avenues for operational excellence, product innovation and customer-centric solutions.”

Tata Passenger Vehicles (Tata PV) revenue declined by 8.2 percent to INR 1,090 billion, reflecting softness in industry demand and the transition to new models. As a result, the EBITDA was 4 percent, down by 180 bps. The net loss for the quarter was INR 870 million, with profitability impacted by adverse volumes, realisations and the effect of leverage. However, these negative impacts were partially offset by continuous efforts to save on variable costs.

Shailesh Chandra, Managing Director TMPV and TPEM, said, “Q1 FY26 was a subdued quarter for the passenger vehicle industry, with volume pressures persisting across most segments. Demand softness weighed on overall performance, although the Electric Vehicle category remained a bright spot, supported by new launches and growing customer interest. Our continued focus on customer engagement and portfolio renewal remained strong during the quarter. New launches – Altroz and Harrier.ev –received encouraging initial market response, with their full impact expected to unfold in the coming months. Looking ahead, while the overall industry growth is expected to remain muted, we are confident that our recent and forthcoming series of launches – across ICE and EVs – will enable us to outperform the market and strengthen our position across key segments.”

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