Quota open for 24,500 car imports under UK FTA

The government has invited fresh applications for the allocation of tariff-rate quotas (TRQs) for importing 24,500 passenger vehicles from the UK at concessional duties in calendar year 2027 under the India-UK Comprehensive Economic and Trade Agreement (CETA). This expands the window for preferential imports after a limited first-year allocation following the pact's mid-year implementation.

The Directorate General of Foreign Trade (DGFT), through a public notice issued on Friday, has invited applications between November 6 and November 21 for quota allocation across three engine-capacity categories. The allocations total 24,500 vehicles, comprising 6,000 cars with engine capacity of up to 1,500 cc, another 6,000 in the middle engine-capacity category and 12,500 larger vehicles.

The middle category covers petrol vehicles with engine capacity exceeding 1,500 cc but not exceeding 3,000 cc, and diesel vehicles above 1,500 cc but not exceeding 2,500 cc. The largest category covers petrol vehicles above 3,000 cc and diesel vehicles exceeding 2,500 cc.

The notification also provides a separate quota of 2,750 completely built units (CBUs) of motor vehicles for the transportation of goods, excluding electric and hydrogen fuel vehicles.

The fresh allocation follows the first round of quota distribution for 2026, in which the government approved six of the eight applications received for 642 vehicles against 4,200 units made available for the remainder of the year. Jaguar Land Rover India secured 325 units, accounting for more than half the approved quota, while BMW India and Skoda Auto Volkswagen India each received 75 units. Three dealerships also secured allocations.

India had committed under CETA to allow imports of 20,000 UK-made cars at preferential duties in the first year. However, with the agreement coming into force on July 15, 2026, the quota available for the remainder of that calendar year was restricted to 4,200 units.

The larger quota now being opened for 2027 will provide a wider opportunity for UK automobile manufacturers and their authorised Indian importers to access the duty concessions negotiated under the agreement.

CETA provides for a substantial reduction in India's import duties on British cars. Basic customs duty on vehicles with engine capacity of up to 1,500 cc has been reduced to 50% from 66%. The rate is also 50% for petrol vehicles above 1,500 cc and up to 3,000 cc, and diesel vehicles above 1,500 cc and up to 2,500 cc.

For larger vehicles, the preferential duty has been reduced to 30% from the standard 110%, making the concessions particularly significant for premium and luxury car imports.