Finshots Daily Why is JLR building in India now
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Feb 11, 2026 They explore why a luxury carmaker is choosing to build a big plant in India now. The discussion covers India's high import duties and how trade deals change the calculus. They walk through long-term risks of relying on open markets and the economics of importing versus local production. The advantages of a Tamil Nadu facility for EVs, exports and supply‑chain resilience are highlighted.
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Protectionism Built India's Auto Ecosystem
- India used very high import duties to force global carmakers to localise production and build supplier ecosystems.
- That protectionism turned India into a manufacturing hub with integrated clusters in states like Tamil Nadu and Gujarat.
FTAs Don't Eliminate Manufacturing Logic
- Recent trade deals like the India-EU FTA lower tariffs and smooth imports for many industries, including luxury cars.
- But lower tariffs alone don't erase strategic reasons to manufacture locally for long-term stability.
Trade Deals Are Politically Fragile
- Trade agreements are political and reversible, so tariff certainty can vanish with policy or government changes.
- Automotive investments face huge long-term risks if firms rely solely on temporary trade liberalisation.