India to Allow 378,000 UK Car Imports Under CETA; Tariffs to Reduce Gradually

The India-UK Comprehensive Economic and Trade Agreement (CETA), set to take effect on July 15, 2026, introduces a phased framework for automobile trade between the 2 countries, as per a PTI news report.  

The arrangement provides limited tariff concessions and quota-based access for passenger vehicles while retaining safeguards for India's domestic electric vehicle industry. 

Conventional Car Imports to Be Phased In 

Over the first 15 years of the agreement, India will allow the import of 378,000 conventional-engine passenger cars from the United Kingdom at concessional customs duties.  

Tariffs on eligible vehicles will gradually decline to 10%, with the annual quota peaking at 37,000 units in the fifth year before settling at 15,000 units a year from the fifteenth year onward. 

In the first year, 20,000 vehicles will be permitted under the quota. This includes 10,000 large-engine cars with duties reduced from 110% to 30%, along with 5,000 mid-sized vehicles and 5,000 mass-market models up to 1,500 cc, both attracting customs duties of 50% instead of 66%. 

Electric Vehicle Provisions and Export Access 

No tariff concessions have been offered for electric, hybrid or hydrogen passenger cars during the first 5 years.  

From the sixth year, vehicles priced between £40,000 and £80,000 will be eligible for a 50% customs duty under a quota of 400 units, while models priced above £80,000 will attract a 40% duty with a quota of 4,000 units. These duties will reduce to 10% by the tenth year. 

India has also kept vehicles priced below £40,000 outside the concession framework, protecting the domestic mass-market electric vehicle segment and manufacturers such as Tata Motors Passenger Vehicles, Mahindra & Mahindra and Maruti Suzuki. 

Separately, Indian manufacturers will gain duty-free access to the United Kingdom for eligible electric, hybrid and hydrogen passenger cars from the sixth year, with the quota rising to 88,000 units by the fifteenth year. 

Read More: Domestic Passenger Vehicle Dispatches Rise 27.3% to Reach 4,38,854 Units in May 2026! 

Conclusion 

The India-UK CETA establishes a quota-based system for passenger vehicle trade, combining phased tariff reductions with measures that preserve protection for India's mass-market electric vehicle segment.   

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