How companies can import cars from UK at lower taxes:Govt officially makes public process of importing vehicles under new trade deal

The government of India has officially made public the rules and procedures for importers to apply for government approval to import cars from the UK at lower tax rates to avail off the benefits of India-UK FTA, which materialises on 15 July, 2026. India has notified the procedure for importers to seek government approval to avail quota-based duty concessions on imports of passenger cars and goods vehicles under the free trade agreement with the UK. Under the Comprehensive Economic and Trade Agreement (CETA), India will reduce import duties on automotive imports from about 110% to 10%, with quotas on both sides.
India is allowing import of 3.78 lakh units of conventional-engine passenger cars, from the UK at concessional customs duty during the first 15 years of the implementation of the trade pact between the two countries. Procedure for allocation of Tariff Rate Quotas (TRQ) under India-UK (CETA) is notified. -Directorate General of Foreign Trade (DGFT) Procedure: It said that at the time of clearance of the import consignment, the importer in India has to produce a Certificate of Origin issued by the concerned authorities in the UK. Only Original Equipment Manufacturers (OEMs), Dealers/Channel Partners duly authorised by the OEMs of vehicles originating in the UK shall be eligible to apply for the TRQ. – DGFT Eligibility Criteria: The DGFT also said that to be eligible, each applicant will have to submit a pre-purchase agreement issued by an OEM of the vehicles in the UK setting out the quantity of vehicles agreed to be supplied to the applicant during the TRQ year. The year in respect of these imports will be the period from 1st January to 31st December, i.e., calendar year in India. DGFT shall monitor the cumulative quantities for TRQ Certificates issued. No TRQ Certificates shall be issued once the stated TRQ quantity limit is reached. -DGFT These certificates, it said, will be valid for a maximum period of 12 months or till the end of the calendar year, whichever is earlier. For imports from the UK to India, the quota for conventional-engine passenger cars will peak in the fifth year across specified categories of vehicles at 37,000 units, with customs duties reduction reaching a final 10 per cent. The duties will not be reduced beyond this.
In the first year, the quota for passenger cars of engine size more than 3,000 cc (petrol) and over 2,500 cc (diesel) is 10,000 units, with customs duty being reduced to 30% from 110%.
For cars with engine size of 1,500 cc (petrol), 2500 cc (diesel) and 3,000 cc (petrol), the quota is 5,000 units, with duty being reduced to 50% from 66%.
In the mass market segment of engine size of up to 1,500 cc, the allowed quota of import in the first year of the pact is 5,000 units, with customs duty being reduced to 50% from 66%, as per the document.
A total of 20,000 units of passenger cars across the three categories will be allowed to be imported in the first year under the agreement.
India has not opened its market for vehicles priced below GBP 40,000 (CIF), ensuring complete protection for the mass-market EV segment in which India seeks global leadership through its homegrown firms like Tata Motors and Mahindra Mahindra, besides Maruti Suzuki.
In the first five years, India has not given any concessions for electric/ hybrid/ hydrogen-passenger cars, but from the 6th year, such vehicles priced between GBP 40,000 CIF (Cost, Insurance, and Freight) to GBP 80,000 CIF (inclusive), the duties will be reduced to 50 per cent with a quota size of 400 units, while for those vehicles priced above GBP 80,000 CIF, the duties will be lowered to 40 per cent with an import limit of 4,000 units.