India invites applications for car import quota of 2026 under India-UK CETA

With the India-UK Comprehensive Economic and Trade Agreement (CETA) coming into effect, India has invited the first round of applications for the allocation of 2026 import quotas for fully-built passenger cars and goods vehicles under the duty concession provisions of the India-UK free trade agreement.

The Directorate General of Foreign Trade (DGFT) has said that importers seeking to import vehicles from the UK under the quota-based duty concessions (tariff rate quota - TRQ) provided under the agreement can submit their applications from July 21 to August 4. The applications have been invited for allocation of quota to the importers for 9,316 units in the first phase.

Under CETA, India has allowed the import of a total of 3.78 lakh units of conventional-engine passenger cars, including those in the mass segment, from the UK at a concessional customs duty during the first 15 years of the implementation of the trade pact between the two countries. Further, the tariffs on automotive imports will fall from about 110% to 10%, with quotas on both sides.

Only Original Equipment Manufacturers (OEMs), dealers and channel partners duly authorised by the OEMs of vehicles originating in the UK will be eligible to apply for the TRQ. In order to be eligible for the concession, each applicant has to submit a pre-purchase agreement issued by an OEM of the vehicles originating in the UK setting out the quantity of vehicles agreed to be supplied to the applicant during the TRQ year for importation into India under each TRQ.

The quota for cars with an engine capacity of up to 1,500 cc has been kept at 2,329 units. These vehicles will attract a basic customs duty of 50% instead of 66%. Likewise, for cars with engine capacity exceeding 1,500 cc but below 3,000 cc for petrol-run vehicles or exceeding 1,500 cc but not exceeding 2,500 cc for diesel-run vehicles, the quota again has been set at 2,329 units. On these vehicles, the duties have also been reduced to 50% from 66%. A quota of 4,658 units has been set for cars with an engine capacity of more than 3,000 cc for petrol-run vehicles and 2,500 cc for diesel-run vehicles. For these categories, the import duty will come down to 30% from 110%.