The Directorate General of Foreign Trade (DGFT) has operationalised the automotive import provisions of the India-United Kingdom Comprehensive Economic and Trade Agreement (CETA), paving the way for concessional-duty imports of up to 20,000 UK-built internal combustion engine (ICE) passenger cars in the first year under a tariff rate quota (TRQ) mechanism.
The notification establishes the operational framework for quota allocation, eligibility, customs documentation and utilisation, completing the procedural roadmap for implementing the automotive market access commitments under the trade pact.
Apart from notifying the annual import quota, the public notice lays down eligibility criteria, documentation requirements, quota allocation methodology, customs procedures and utilisation conditions for importers seeking to avail the concessional tariff benefits.
Only original equipment manufacturers (OEMs), or dealers and channel partners authorised by UK vehicle manufacturers, will be eligible to apply for TRQ allocations. Applicants must submit a pre-purchase agreement issued by the OEM specifying the proposed import quantity, while every shipment must be accompanied by a valid UK Certificate of Origin. The eligibility conditions effectively prevent unauthorised traders from accessing the concessional-duty quota. Importers have also been advised to endeavour to pass on the benefit of the lower customs duty to end consumers.
Where total demand remains within the annual quota, applicants will receive the quantity sought. However, if applications exceed the notified limit, allocations will be made on a pro-rata basis in proportion to the quantities specified in the respective pre-purchase agreements. DGFT will issue TRQ certificates electronically and monitor cumulative quota utilisation, with authorisations ceasing once the annual allocation has been exhausted.
To improve utilisation, the notification provides that importers failing to utilise a significant portion of their allotted quota during a TRQ year could see such under-utilisation taken into account while determining allocations for the following year. DGFT has also retained the flexibility to review the allocation methodology after two years based on utilisation trends. TRQ authorisations will remain valid for 12 months from the date of issue or until the end of the relevant calendar year, whichever is earlier.
Quota Breakdown
Under the first-year quota, India will allow concessional-duty imports of 20,000 UK-built passenger cars, comprising 10,000 vehicles with engines above 3,000 cc petrol or 2,500 cc diesel, 5,000 vehicles with petrol engines between 1,500 cc and 3,000 cc (or diesel engines up to 2,500 cc), and another 5,000 vehicles with engines up to 1,500 cc. Under the agreement, the annual quota for conventional-engine passenger cars will gradually rise to 37,000 units by the fifth year, while customs duties will eventually decline to 10%.
Separate tariff rate quota schedules have also been notified for ICE goods vehicles, while a dedicated TRQ regime for electric, hybrid and hydrogen-powered passenger vehicles will come into effect from the sixth year of the agreement. The framework is expected to provide a preferential import route for eligible UK-built premium and luxury vehicles, including Jaguar Land Rover, MINI, Bentley, Rolls-Royce, Aston Martin, McLaren and Lotus, while retaining annual quantitative limits and requiring compliance with prescribed origin and eligibility conditions.
