India has opened applications for the import of 27,250 vehicles from the United Kingdom at reduced customs duties under the India-UK Comprehensive Economic and Trade Agreement (CETA), marking another step in the implementation of the bilateral trade pact.
The Directorate General of Foreign Trade (DGFT) has invited applications for Tariff Rate Quotas (TRQs) covering 24,500 passenger cars and 2,750 commercial vehicles for the 2027 calendar year.
The application window opened on November 6, 2026, and will remain available until November 21, allowing eligible automobile manufacturers, authorized dealers and channel partners of UK-based vehicle companies to apply for concessional import allocations.
The arrangement forms part of the India-UK trade agreement, which came into effect on July 15, 2026, with provisions aimed at reducing trade barriers and expanding market access between the two countries.
Passenger vehicle quotas divided into three categories
Under the agreement, the Indian government has allocated 24,500 passenger vehicle import quotas across three engine-capacity categories, with different preferential customs duty rates.
The first category covers vehicles with engine capacities of up to 1,500 cc, with an annual allocation of 6,000 units. These vehicles will qualify for a reduced import duty of 50 percent.
A further 6,000 vehicles have been allocated to the intermediate category, covering petrol engines between 1,500 cc and 3,000 cc and diesel engines up to 2,500 cc, subject to the applicable classification rules. The preferential duty for this category is set at 40 percent during the second year of implementation.
The largest allocation, comprising 12,500 vehicles, applies to higher-capacity passenger cars, including petrol vehicles with engines exceeding 3,000 cc and diesel vehicles above 2,500 cc.
Import duties for these vehicles will be reduced to between 25 and 30 percent, depending on the applicable tariff schedule and implementation phase.
The concessions are expected to benefit British manufacturers seeking greater access to India’s automobile market, particularly in the premium and luxury vehicle segments.
Commercial vehicle imports receive separate allocation
In addition to passenger cars, the DGFT has established a quota of 2,750 commercial vehicles for import from the United Kingdom during 2027.
The allocation applies to eligible motor vehicles designed for transporting goods, excluding electric and hydrogen-powered vehicles.
These imports will also be subject to the preferential tariff arrangements established under the bilateral trade agreement.
The quota system allows a specified number of qualifying vehicles to enter India at reduced customs duties while maintaining separate tariff treatment for imports exceeding the approved limits.
Trade agreement aims to expand bilateral automobile market access
The India-UK Comprehensive Economic and Trade Agreement is designed to strengthen commercial ties by reducing tariffs, improving market access and facilitating trade across several sectors.
Automobiles represent a significant component of the agreement, given India’s large domestic automotive market and the United Kingdom’s established luxury and premium vehicle manufacturing industry.
The phased tariff reductions are intended to provide British manufacturers with improved access to Indian consumers while allowing India to manage the pace of import liberalization.
For Indian buyers, the preferential duty structure could eventually reduce the import costs of certain British-manufactured vehicles, although final retail prices will depend on additional taxes, distribution costs and manufacturers’ pricing decisions.
Applications close November 21
Eligible companies seeking to import vehicles under the 2027 tariff concessions must submit their applications within the designated November 6–21 window.
The DGFT will administer the allocation process in accordance with the applicable trade agreement provisions and import eligibility requirements.
The opening of the quota application process represents a further stage in implementing the India-UK trade agreement, with both countries seeking to expand bilateral commerce and strengthen cooperation in the automotive sector.
