India-U.K. trade deal: Quotas and tariffs for car imports unveiled
The Indian government has released detailed quotas and tariffs for imports of passenger vehicles from the United Kingdom under the Comprehensive Economic and Trade Agreement (CETA), which is scheduled to take effect on July 15.
According to a notification from the Directorate General of Foreign Trade, a total of 20,000 completely built units (CBUs) of petrol and diesel passenger vehicles will be allowed for import from the U.K. at concessional rates ranging from 30% to 50%, depending on the size of the car. This is a significant reduction from the standard import duty of 66% to 110%.
The quota for conventional fuel vehicles will increase to 37,000 cars by the fifth year of the deal, at which point the concessional tariff will settle at 10% and remain at that level. However, after this peak, the quota will gradually decrease, settling at 15,000 vehicles in the fifteenth year.
For electric vehicles (EVs), hybrids, and hydrogen-based passenger vehicles, separate quotas and tariffs have been established. Unlike conventional vehicles, these concessions are based on cost rather than engine size. Importantly, these benefits will only begin from the sixth year of the agreement, providing domestic manufacturers a buffer period before facing competition from U.K. brands.
Under the terms, no alternate fuel vehicle with a landed cost below £40,000 (approximately ₹51.2 lakh) will qualify for any concessions. In the sixth year, a total of 400 alternate fuel vehicles priced between £40,000 and £80,000 (₹51.2 lakh to ₹102.4 lakh) will be allowed at a tariff of 50%, down from the standard 110%.
This quota will gradually increase to 2,000 vehicles per year by the fifteenth year, while the tariff will fall to 10% by the tenth year after implementation.
Ultra-luxury alternate-fuel vehicles priced above £80,000 will receive the largest quota — starting at 4,000 vehicles in the sixth year and rising to 20,000 vehicles by year fifteen. The tariff on these vehicles will begin at 40% in year six and decrease to 10% by year ten.
The phased implementation and reduction in tariffs aim to balance market access with protection for domestic industry.
