The Directorate General of Foreign Trade (DGFT) has opened the application window for importers seeking to bring cars from the United Kingdom under the tariff rate quota (TRQ) provisions of the India-UK Comprehensive Economic and Trade Agreement (CETA). According to a DGFT notification, applications can be submitted from July 21 to August 4, 2026.
CETA Tariff Cuts and Quota Volumes
Under CETA, which came into effect on July 15, 2026, India permits a total of 3.78 lakh units (378,000) of conventional-engine passenger cars from the UK at reduced customs duties over the first 15 years of the pact. Tariffs on automotive imports will drop from approximately 110 percent to 10 percent, with quotas applied on both sides.
The first-year overall quota for passenger cars is set at 2,500 units. For the import of completely-built motor vehicles for the transport of goods, an initial quota of 1,164 units has been fixed, with a first-year cap of 2,500 units. These goods vehicles will attract a 37 percent duty instead of the previous 44 percent.
Quota Breakdown by Engine Capacity
The DGFT notification specifies three quota categories for passenger cars, each with a reduced tariff:
| Engine Capacity | Quota (Units) | Old Duty | New Duty |
|---|---|---|---|
| Up to 1,500 cc | 2,329 | 66% | 50% |
| >1,500–3,000 cc (petrol) or >1,500–2,500 cc (diesel) | 2,329 | 66% | 50% |
| >3,000 cc (petrol) or >2,500 cc (diesel) | 4,658 | 110% | 30% |
Application Requirements
To be eligible, each applicant must submit a pre-purchase agreement issued by an original equipment manufacturer (OEM) of the vehicles originating in the UK. The agreement must specify the quantity of vehicles agreed to be supplied to the applicant during the particular TRQ year for importation into India.
Implications for Importers
Importers should note that the application period is short — only from July 21 to August 4 — and that the concessional duty is contingent on holding a valid OEM pre-purchase agreement. With first-year quotas limited to 2,500 units for passenger cars and 2,500 for goods vehicles, early filing is essential. The significant tariff reduction for large-engine cars (from 110% to 30%) offers the greatest cost-saving opportunity.
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