DGFT introduces tariff rate quota for UK built passenger car imports under India UK-CETA

The Directorate General of Foreign Trade (DGFT) has operationalised the automotive tariff rate quota (TRQ) framework under the India-United Kingdom Comprehensive Economic and Trade Agreement (CETA). This move allows imports of up to 20,000 UK-built internal combustion engine passenger cars at concessional duty rates in the first year.

Key Highlights

• DGFT operationalises a tariff rate quota for UK-built passenger car imports under the India-UK CETA.
• Up to 20,000 internal combustion engine passenger cars are allowed at concessional duty in the first year.
• Quota allocation based on vehicle engine size and pre-purchase agreements from OEMs.
• Eligible manufacturers include Jaguar Land Rover, MINI, Bentley, Rolls-Royce, Aston Martin, McLaren, and Lotus.
• Quota utilisation and allocation methodology subject to review after two years.

Quota Structure and Eligibility

The first-year quota permits 20,000 internal combustion engine passenger cars from the UK. This includes 10,000 vehicles above 3,000 cc petrol or 2,500 cc diesel, 5,000 vehicles between 1,500 cc and 3,000 cc petrol (or up to 2,500 cc diesel), and 5,000 vehicles up to 1,500 cc.

Separate TRQ schedules have also been notified for internal combustion engine goods vehicles. A dedicated TRQ regime for electric, hybrid, and hydrogen-powered passenger cars will begin from the sixth year of the agreement.

The notification outlines procedures for quota allocation, eligibility, customs documentation, and utilisation. Only original equipment manufacturers (OEMs), or dealers and channel partners authorised by UK vehicle manufacturers, can apply for TRQ allocations. Applicants must provide a pre-purchase agreement from the OEM specifying the quantity of vehicles to be imported. Each consignment must be accompanied by a valid UK Certificate of Origin.

Quota Allocation and Compliance

If the total quantity requested by eligible applicants is within the annual quota, they will receive the quantity requested. If applications exceed the quota, allocations will be made on a pro-rata basis according to the quantities in the pre-purchase agreements. DGFT will issue TRQ certificates electronically and monitor cumulative utilisation. Authorisations will cease once the annual quota is exhausted.

The notification also introduces a mechanism to improve quota utilisation. Importers who fail to use a significant portion of their allotted quota during a TRQ year may have this under-utilisation considered in future allocations. The DGFT retains the flexibility to review the allocation methodology after two years, based on utilisation trends. This allows for possible adjustments to improve effective use of the concessional import quotas.

TRQ authorisations are valid for 12 months from the date of issue or until the end of the relevant calendar year, whichever is earlier. The notification takes immediate effect, completing the procedural framework needed to operationalise the automotive market access commitments under the India-UK CETA.

Impact on Vehicle Imports

The framework is expected to provide a preferential import route for eligible UK-built premium and luxury vehicles. Manufacturers such as Jaguar, Land Rover, MINI, Bentley, Rolls-Royce, Aston Martin, McLaren, and Lotus could benefit, subject to meeting origin and eligibility conditions. The framework retains quantitative limits through annual quotas, rather than permitting unrestricted concessional-duty imports.

Importers are encouraged to pass on the benefit of concessional customs duty to the final buyer or consumer. The notification establishes clear eligibility criteria, documentation requirements, and customs procedures. It aims to prevent unauthorised traders from accessing the concessional-duty quota independently.

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CarBike 360 Says

The DGFT’s tariff rate quota framework under the India-UK CETA marks a calibrated step toward trade liberalisation while safeguarding domestic interests. By regulating UK-built passenger car imports, the policy creates a balanced pathway for competition and collaboration. Its real impact will depend on market response, pricing strategies, and how effectively stakeholders adapt to this evolving automotive trade landscape.