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.”

Comments (0)

ADD COMMENT

Link Copied!

After reports of a lack of availability or less availability of petrol, diesel and CNG came in from various parts of India, the news is out that the state refiners have hiked the price of petrol and diesel by roughly INR 3 per litre across major parts of India.

The hike in petrol and diesel prices has come after four years and against the background of the West Asia conflict involving US, Israel and Iran. Since the conflict began a few months back, the prices of crude oil per barrel have been rising. They stand at approximately USD 107.09 per barrel as of current. 

The price increase, industry sources aware of the overall development in the crude oil sector indicate, is only about one-tenth of the rise that would be necessary to make up for the losses the oil refiners are incurring at the moment. 
The increase in petrol and diesel prices follows the increase in CNG prices by around INR two sometime ago by providers like Mahanagar Gas. 

While the Union Petroleum Minister is known to assert that there is no shortage of fuel in the country, there have been reports from regions like the stretch of the Mumbai-Goa highway in Maharashtra, where pumps have run dry. There have been reports from regions like Nagpur in central India, where truckers have had to halt their journey as pumps ran dry of fuel earlier than expected and had to limit the quantity of fuel they could provide to their consumers. 

Petrol in Mumbai now costs INR 106.68 per litre, approximately, whereas diesel now costs INR 93.4 per litre, roughly. CNG per kg retails at about INR 84, up from the earlier INR 82.

As a result of the price rise in all the fuels used by the mobility sector, a fear is growing that the freight rates will go up, which would have a ripple effect on the prices of commodities. Other than plastics and metals, the prices of various oils, including cooking oil, are expected to go up somewhat if not sharply.   

Comments (0)

ADD COMMENT

Link Copied!

The Climate Pledge, co-founded by Amazon, has introduced a landmark evidence-based framework for converting India's diesel freight fleet to battery electric trucks, developed alongside the C40 Cities climate network. The National EV Highway Guidance Framework lays out a staggered timeline starting with 20 priority highways named by the Ministry of Heavy Industries, with an initial target of 2027. The plan extends to industrial zones and port connections, aiming for a fully integrated electric freight network nationwide by 2035.

India faces rapidly rising freight demand, projected to grow more than four times by mid-century. Roadways already handle nearly seventy percent of all goods moved, and despite medium and heavy trucks representing only three percent of vehicles, they generate roughly 53 percent of particulate emissions. Electrifying freight supports the national goal of reaching net-zero emissions by 2070.

The framework builds on the Laneshift pilot, a collaboration that united truck makers, fleet operators, logistics firms and financiers. On the Bengaluru–Chennai corridor, electric trucks logged over 200,000 kilometres across 600 trips, providing data on performance and operating costs while encouraging early adoption through multi-year contracts. A 6,500-kilometre trial along the Golden Quadrilateral further tested scalability. The pilot proved operational feasibility across all scenarios and commercial viability for daily runs above 400 kilometres, resulting in a 4.2-fold jump in electric truck orders and long-term commercial agreements.

The framework outlines priorities spanning charging infrastructure, demand generation and fleet operations. Aligned with the government's push for electrification, the roadmap offers a practical pathway to transform one of India's most emissions-intensive sectors.

Dr O P Agarwal, Distinguished Fellow, NITI Aayog, said, “India’s transition to cleaner freight will require strong collaboration across government and industry. The EV Highway Guidance Framework launched under the Laneshift programme today is an important step in this direction and will help create a scalable pathway for electric trucking in the country. Through the e-FAST India platform, NITI Aayog has been bringing together logistics operators, OEMs, energy providers and financial institutions to build an enabling ecosystem for freight electrification. Building on these efforts, partnerships led by C40 Cities, The Climate Pledge and private sector stakeholders such as Amazon and Ashok Leyland demonstrate how collaborative action can help move electric freight from pilots to large-scale deployment.”

Abhinav Singh, VP, Operations, India and Australia, Amazon, said, “We continue to invest in making our operations more sustainable, and electrifying our logistics is a key part of that effort. Through The Climate Pledge, we are also working with stakeholders to help scale electric freight solutions more broadly in India. The project findings and framework are encouraging and reinforce the importance of continued collaboration between government and industry to accelerate adoption.”

Naim Keruwala, Regional Director for South and West Asia at C40 Cities, said, “Decarbonising freight is not a future ambition; it is an immediate economic and public health imperative for the country. Laneshift has shown that zero-exhaust-emission trucks can operate commercially on long-haul corridors, that costs are coming down and that when the right stakeholders align their efforts, barriers give way. India has the scale, the policy momentum and the industry appetite to be the next frontier.”

Comments (0)

ADD COMMENT

Link Copied!

The share of electric buses in new bus sales in India is expected to reach 35-40 percent by FY2035, from the current level of around 7 percent states a recent report titled ‘Electrifying India’s Bus Industry – The Decade of Transformation’ by KPMG.

It indicates that the bus sector is entering a phase of structural change with the shift being driven by urbanisation, sustainability commitments and government-led mobility initiatives.

The report notes that the Indian bus market, which typically averages 35,000 to 50,000 units annually, is transitioning due to electrification and infrastructure investment. Buses currently account for nearly 57 percent of passenger-kilometres travelled in the country. Data shows that 16,300 electric buses were operational in India as of March 2026, and approximately 62,000 e-bus tenders have been issued to date.

Rohan Rao, Partner, KPMG India, said, “India’s electric bus transition is moving beyond a policy-led initiative to becoming a structural transformation opportunity for the broader mobility ecosystem. Public transport electrification has already created strong momentum, supported by government procurement programmes, improving cost economics, and increasing infrastructure investments.”

Raghavan Viswanathan, Partner, KPMG in India, added, “India’s e-bus ecosystem is entering a critical phase where scale, localisation and execution capabilities will become key differentiators. While public transport undertakings continue to lead adoption, the next phase of growth is expected to emerge from private intercity mobility, airport transport, platform-based mobility solutions and corporate fleets.”

The analysis finds that electric buses offer 70 percent higher energy efficiency and lower lifetime emissions than diesel equivalents. In public intracity operations, electric buses have reached total cost of ownership parity with diesel and CNG variants under high-utilisation scenarios.

Government schemes, such as PM-eBus Sewa, are projected to save between 1 and 2 million tonnes of CO2 and reduce oil imports by USD 2 to 3 billion over the concession period.

Projections suggest that India will tender nearly 40,000 additional electric buses by 2030. Within the public transport segment specifically, electric vehicle penetration is expected to exceed 85 percent by FY2035. Coordination between manufacturers, financiers and infrastructure providers remains a factor in achieving these targets.

Representational image courtesy: Tata Motors

Comments (0)

ADD COMMENT

Link Copied!

On May 14, 2026, Japanese automotive major Honda Motor Co, unveiled a comprehensive roadmap to restructure its automobile business, prioritising a ‘multi-faceted approach’ to carbon neutrality that leans heavily on next-generation hybrid technology and strategic growth in three key regions.

Facing a challenging global environment and a slowing EV market, Honda is reallocating resources to ensure a return to record profitability by FY2029.

Interestingly, it has identified India as one of three ‘priority regions’ (alongside North America and Japan) central to Honda's future growth strategy. To address past limitations in the region, Honda is shifting away from standard global specifications toward a market-specific approach.

The Japanese automotive major has announced the establishment of a new subsidiary – Honda Digital Innovation India (HDII), which will be based in Bengaluru. This new subsidiary will build a digital platform to integrate motorcycle and automobile services, creating a unique mobility ecosystem.

Furthermore, in 2028, Honda will introduce strategic models tailored to Indian preferences, specifically targeting the high-volume ‘under 4 meters’ category and the mid-size segment.  

Leveraging its massive motorcycle footprint (nearly 6 million units sold annually), Honda aims to capture customers upgrading from two-wheels to entry-level automobiles.

Honda has announced its plans to increase its annual two-wheeler production capacity in India from 6.25 million to 8 million units by 2028, positioning the country as a primary global export hub.

In addition, a new financial services arm is scheduled to become operational by March 31, 2027, to bolster sales opportunities in India.

While Honda remains committed to carbon neutrality by 2050, it is strategically slowing some EV initiatives – including suspending a comprehensive EV value chain project in Canada – to focus on the immediate demand for hybrid vehicles.

The ‘Triple Half’ Approach

To compete with emerging OEMs, Honda is implementing a lean manufacturing and development strategy. The ‘Triple Half’ initiative seeks to reduce development costs, timeframes and workloads by 50 percent compared to 2025 levels.

Honda aims to improve production efficiency by 20 percent over the next five years through digital transformation and AI.

The company will move away from complete internalisation, instead leveraging external partnerships for batteries (such as the L-H Battery joint venture) and standardising components to mitigate tariff impacts and supply risks.

Honda anticipates that these structural changes will lead to a record-high operating profit of JPY 1.4 trillion by FY2029. During this period, the company plans to invest JPY 6.2 trillion in total resources, with JPY 4.4 trillion specifically dedicated to petrol and hybrid models. For shareholders, Honda has committed to stable and continuous dividend payments with a target 3 percent Dividend on Equity (DOE).

Toshihiro Mibe, Director, President and Representative Executive Officer (Global CEO), Honda Motor Co, said, “India is one of the few markets in the world where further expansion is expected in the future. However, currently, Honda is present in only a limited range of product segments and has not been able to fully expand sales volume due to an insufficient number of competitive models in each segment. One contributing factor is that we have not been able to deliver products fully aligned with the characteristics and preferences of customers in India. It has been our standard approach to develop all products based on global standard performance specifications, regardless of target countries and regions and to sell such products in different regions.”

“However, climate conditions, vehicle usage patterns, customer preferences and other factors vary significantly from country to country and region to region. As environmental regulations and other laws and rules are also different, in some cases, the global specifications of our vehicles have been somewhat excessive in the Indian market. Therefore, we will redefine the best specifications that are well aligned with the market environment and customer needs in India.

“Then, in 2028, we will begin introducing strategic models tailored to the Indian market that pursue an optimal balance of performance and price that satisfies our customers in India. To be more specific, we will launch our strategic models in two categories. One is for ‘vehicles under 4 meters in length’, which has the largest volume in India, and the other is the mid-size category. We will proactively utilise local development resources, including external resources, and introduce new models as quickly as possible. The solid foundation of our motorcycle business will become the key strength of Honda in this market," said Mibe.

Comments (0)

ADD COMMENT

Link Copied!