India lays out tariffs and quotas for U.K. vehicles under trade deal

The Indian government has released the list of quotas and tariffs for automobile imports from the United Kingdom under the trade deal between the two countries. The India-U.K. Comprehensive Economic and Trade Agreement (CETA) will come into force on July 15.

As per the Directorate General of Foreign Trade’s notification, a total of 20,000 completely built units (CBUs) of petrol and diesel passenger vehicles will be allowed for import from the U.K. at concessional rates of 30-50%, depending on the size of the car, down from the normal import duty of between 66-110%. 

This quota will increase to 37,000 cars by year 5 of the deal, which is also when the concessional tariff will settle at 10% and remain there. However, after this, the size of the quota will gradually decrease, settling at 15,000 passenger vehicles in year 15.

Similarly, the notification also lays out the quotas and tariffs for electric vehicles (EVs), hybrids, and hydrogen-based passenger vehicles. While the gradations for the conventional fuel passenger vehicles are made on the basis of engine size, the gradations for these alternate fuel vehicles are on the basis of cost. 

The concessions for these vehicles will kick in only from year 6 of the deal, providing domestic manufacturers a buffer before they will have to start competing with U.K. brands. 

Under the deal, no alternate fuel vehicle with a landed cost of less than 40,000 pounds (about ₹51.2 lakh) will receive any concessions. A total of 400 alternate fuel vehicles priced between 40,000-80,000 pounds (₹51.2-102.4 lakh) will be allowed in the sixth year, at a tariff of 50%, down from the normal 110%. 

This quota will gradually increase to 2,000 vehicles per year by year 15, and the tariff will fall to 10% by year 10 of the deal’s implementation. 

Ultra-luxury alternate-fuel passenger vehicles priced above 80,000 pounds will receive the highest quota — starting at 4,000 vehicles in year 6, which will increase to 20,000 vehicles by year 15. The tariff on these vehicles will start at 40% in year 6 and fall to 10% by year 10.