India Launches First Vehicle Import Quota Under CETA

NEW DELHI — The Indian government has officially opened the application window for the allocation of import quotas for fully built passenger cars and goods transport vehicles originating from the United Kingdom, following the implementation of the India-UK Comprehensive Economic and Trade Agreement (CETA). According to a notification issued by the Directorate General of Foreign Trade (DGFT), eligible importers can submit applications for Tariff Rate Quotas (TRQ) for the calendar year 2026 between July 21 and August 4.

The landmark trade agreement, which formally came into effect on July 15, permits the import of up to 3.78 lakh conventional-engine passenger vehicles from the UK over the first 15 years of the pact at significantly reduced tariff rates. In this inaugural phase, the government has earmarked quotas for 9,316 passenger and commercial vehicles to enter the domestic market under concessional customs duties.

Quota Segments and Duty Concessions

According to the DGFT framework, eligibility is strictly restricted to original equipment manufacturers (OEMs), authorized dealers, and channel partners certified by UK vehicle manufacturers. Applicants must provide a valid pre-purchase agreement issued by a UK-based OEM outlining the exact quantity of units to be supplied during the quota period.

The initial phase division covers several distinct vehicle categories:

• Small and Mid-Range Engines: A quota of 2,329 units has been allocated for passenger cars with engine capacities up to 1,500 cc, which will attract a reduced basic customs duty of 50% instead of 66%. A matching quota of 2,329 units is set for petrol cars between 1,500 cc and 3,000 cc, and diesel cars between 1,500 cc and 2,500 cc, also taxed at 50%.

• High-Capacity Luxury Vehicles: The largest allocation of 4,658 units is reserved for larger passenger cars featuring petrol engines above 3,000 cc and diesel engines above 2,500 cc. Customs duties for this tier are slashed from approximately 110% down to 30%.

• Goods Transport Vehicles: A separate quota of 1,164 units has been established for fully built commercial transport vehicles, carrying a preferential duty of 37%.

Official Sources Section

The administrative procedures, timelines, and quantitative allocations were formally promulgated through statutory trade notices issued by federal regulatory authorities.

"According to officials, the phased implementation of tariff rate quotas ensures a balanced introduction of international automotive brands while safeguarding domestic industrial interests."

Further application guidelines, regulatory compliance criteria, and notification documents can be accessed via the Directorate General of Foreign Trade (DGFT) portal, the Ministry of Commerce and Industry, and the Government of the United Kingdom Trade Campaign.

Why It Matters

For international automotive manufacturers and UK exporters, the opening of the TRQ application window represents a tangible milestone following the enactment of the bilateral trade pact, unlocking structured access to South Asia's rapidly expanding luxury and premium vehicle segments. For domestic consumers and automotive enthusiasts, the policy paves the way for wider choices and reduced retail pricing on iconic British car models over coming subscription cycles.

Key Facts at a Glance

• Agreement Framework: India-UK Comprehensive Economic and Trade Agreement (CETA).

• Application Window: July 21, 2026, to August 4, 2026.

• First-Phase Allocation: 9,316 total vehicle units.

• Eligible Applicants: Authorized OEMs, official dealers, and channel partners.

Frequently Asked Questions

What is the timeframe for submitting vehicle import quota applications?

Eligible importers can submit their applications through the DGFT portal from July 21 to August 4, 2026.

Who is eligible to apply for the Tariff Rate Quota (TRQ)?

Only original equipment manufacturers (OEMs), authorized dealers, and channel partners certified by UK vehicle makers are permitted to apply.

What duty concessions apply to high-capacity luxury cars from the UK?

Vehicles with petrol engines exceeding 3,000 cc and diesel engines above 2,500 cc enjoy a reduced customs duty of 30%, down from the previous 110%.

What documentation is required alongside the application?

Applicants must submit a pre-purchase agreement issued by a UK-based OEM specifying the precise quantity of agreed vehicle supplies for the quota year.

Source: Directorate General of Foreign Trade (DGFT), Ministry of Commerce and Industry, Government of the United Kingdom Trade Campaign