International Relations GS 2 In the news 5 times

Tariff-Rate Quota (TRQ) Mechanism

A Tariff-Rate Quota is a two-tier trade policy instrument: a fixed quantity of a good can be imported at a lower ("in-quota") tariff, while any imports beyond that quantity attract the standard, higher ("out-of-quota") tariff. TRQs let countries offer limited market access to trading partners in politically or economically sensitive sectors without exposing domestic industry to unlimited low-tariff competition — commonly used for agriculture and automobiles in FTAs/CETAs.

Key details

Under the India-UK auto TRQ, 20,000 CBUs qualify for duty of 30–50% (in-quota) in year one, rising to 37,000 units by year five; anything beyond the quota pays the standard MFN duty (66–110%).
Quota allocation in India is administered by the DGFT, which issues eligibility certificates valid for up to 12 months.
Only OEMs and their authorised dealers/partners, holding a pre-purchase agreement with a UK manufacturer, can apply — preventing quota misuse by unrelated importers.

In the news

● Tracked since July 10, 2026 · last seen August 03, 2026 · updates as the daily brief publishes

03 Aug '26

Government invites applications for 30 products' import quota under India-Oman trade pact

Economics

24 Jul '26

US Section 301 tariffs unlikely to hit India’s exports; textiles need close watch, says FIEO

Economics

21 Jul '26

Govt invites applications for car imports under India-UK trade agreement

Economics

14 Jul '26