India Notifies Rules to Avail Lower Import Duty on UK Vehicles Under CETA

India has notified the procedure for importers to claim tariff concessions on vehicle imports from the United Kingdom under the India-UK Comprehensive Economic and Trade Agreement (CETA), which comes into effect on July 15, 2026. The move operationalises the tariff rate quota (TRQ) mechanism that allows eligible importers to bring in specified numbers of UK-made vehicles at significantly lower customs duties.

The Directorate General of Foreign Trade (DGFT) has laid down eligibility conditions, documentation requirements and the quota allocation process for importers seeking to benefit from the agreement.

DGFT Notifies Tariff Quota Rules for UK Vehicle Imports

In a public notice issued on July 9, the DGFT said that only Original Equipment Manufacturers (OEMs) and their authorised dealers or channel partners will be eligible to apply for tariff rate quotas.

To obtain a TRQ certificate, applicants must submit a pre-purchase agreement issued by a UK-based OEM specifying the number of vehicles to be supplied during the relevant calendar year. At the time of import, buyers must also produce a valid Certificate of Origin issued by the authorised UK authorities.

The DGFT will monitor the cumulative quota allocation, and no additional TRQ certificates will be issued once the annual limit is exhausted. Each certificate will remain valid for up to 12 months or until the end of the calendar year, whichever is earlier.

Lower Import Duties Under the India-UK Trade Pact

Under CETA, India will gradually reduce import duties on eligible UK automotive imports from as high as 110% to 10%, subject to specified quotas.

During the first 15 years of the agreement, India will permit the import of 3.78 lakh conventional-engine passenger vehicles at concessional duty rates. In the first year alone, a total of 20,000 passenger cars across different engine categories will qualify for lower tariffs.

The agreement also encourages importers to pass on the benefit of reduced customs duties to consumers wherever possible.

EV Imports Remain Largely Protected

The agreement provides limited concessions for electric, hybrid and hydrogen-powered passenger vehicles. India has not offered tariff benefits for these vehicles during the first five years of the pact, preserving protection for the domestic mass-market EV industry.

From the sixth year, concessional duties will apply only to premium electric and alternative fuel vehicles priced above GBP 40,000, with strict import quotas.

Read more: Best Mutual Funds for Lump Sum Investments in India for July 2026: Quant Multi Asset Fund, Tata Multi Asset Fund, and More!

Conclusion

The notification marks a key step in implementing the India-UK CETA by providing clarity on how importers can access lower customs duties on eligible UK vehicles. While the agreement opens the door for premium vehicle imports at reduced tariffs, quota restrictions and phased implementation are intended to balance trade liberalisation with support for India's domestic automobile industry.

For daily market updates and regular stock market news in Hindi, stay tuned to Angel One's share market news in Hindi. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.