Govt invites applications for car imports under India-UK trade agreement
The government began accepting applications for a tariff-rate quota (TRQ) allowing concessional-duty import of vehicles from the United Kingdom under the India-UK Comprehensive Economic and Trade Agreement (CETA)
The first phase covers 9,316 passenger vehicles for the current calendar year
Applications are being accepted over a defined window, from July 21 to August 4
Only Original Equipment Manufacturers (OEMs), authorised dealers and channel partners of UK vehicle manufacturers are eligible to apply
The scheme is administered by the Directorate General of Foreign Trade (DGFT)
India-UK Comprehensive Economic and Trade Agreement (CETA)
CETA is a bilateral free trade agreement between India and the United Kingdom, covering goods, services, investment and related provisions. It is described as India's most comprehensive trade agreement with a G7 economy and the UK's most significant bilateral trade agreement since leaving the European Union.
Key Details
- Signed in London on 24 July 2025, after 14 rounds of negotiations spanning roughly three years
- Entered into force on 15 July 2026, alongside an accompanying Double Contribution Convention (DCC) on social security, once domestic ratification procedures were completed in both countries
- On entry into force, the UK eliminated duties on 99% of Indian tariff lines, including tariffs of up to 70% on processed foods, 21.5% on marine products, 18% on engineering goods and auto components, 16% on leather and footwear, 12% on textiles, and 8% on chemicals and pharmaceuticals
- On the automobile side, India agreed to reduce tariffs on UK-origin vehicles from around 110% to 10% in a phased manner, subject to quota limits
The car import quota application window is the first operational step in implementing CETA's automobile tariff concessions, translating the treaty's negotiated commitments into an actual import mechanism.
Tariff-Rate Quota (TRQ) Mechanism
A tariff-rate quota is a two-tier trade policy tool that allows a specified quantity of a good to be imported at a lower (concessional) tariff, while imports beyond that quantity attract the normal, higher tariff. It lets a country liberalise trade gradually while protecting domestic industry from an unlimited surge in imports.
Key Details
- Distinguishes TRQs from simple tariff cuts (which apply to unlimited quantities) and from absolute quotas (which block imports beyond a cap entirely, regardless of duty paid)
- Under India-UK CETA, India has committed to allow import of up to 3.78 lakh conventional passenger and goods vehicles from the UK over the agreed period, with the concessional 10% duty applying only within the annual quota
- The first-phase allocation of 9,316 vehicles for the current calendar year is administered as a TRQ, with eligibility restricted to OEMs, authorised dealers and manufacturer-approved channel partners
- India has used similar phased/quota-based tariff liberalisation in other recent trade pacts, such as the India-Australia ECTA (signed April 2022, in force December 2022) for select agricultural and mineral products
The DGFT's application window operationalises the TRQ for UK vehicles — importers must secure an allocation within the 9,316-unit cap to access the concessional 10% duty rather than the standard, much higher import duty on completely built-up cars.
Directorate General of Foreign Trade (DGFT)
The DGFT is the government body under the Ministry of Commerce and Industry responsible for implementing India's Foreign Trade Policy, including issuing import-export licences, allocating tariff-rate quotas, and administering trade agreement-related schemes.
Key Details
- Functions under the Ministry of Commerce and Industry
- Responsible for operationalising market-access commitments made in FTAs/CEPAs/CETAs through licensing and quota-allocation mechanisms, since treaty commitments require domestic implementing rules to take practical effect
- Similar TRQ-administration roles have been performed by DGFT for other trade agreements, such as import quota allocations under the India-UAE CEPA (signed February 2022, in force May 2022)
DGFT is the implementing authority inviting and processing the vehicle import applications, making it the institutional link between the CETA treaty text and importers on the ground.
- India-UK CETA signed: 24 July 2025, London; entered into force: 15 July 2026
- First-phase vehicle import quota: 9,316 passenger vehicles for the current calendar year
- Application window: July 21 to August 4
- Tariff on UK-origin vehicles under quota: reduced from about 110% to 10%
- Total vehicle quota over the agreement period: up to 3.78 lakh conventional passenger and goods vehicles from the UK
- UK tariff elimination on entry into force: duty-free access for 99% of Indian tariff lines