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The first round of India’s tariff-rate quota (TRQ) for cars imported from the UK under the Comprehensive Economic and Trade Agreement (CETA) has seen a muted response, with applications received for only 642 vehicles against a quota of 5,000 units available for the current calendar year, a senior government official said.
All 642 units for which applications were filed have been approved. In total, eight applications were received for importing cars from the UK at concessional duties; seven were found to be in order while one applicant was issued a deficiency letter, the official said.
The Directorate General of Foreign Trade (DGFT) invited applications for the quota from July 21, less than a week after CETA came into force on July 15, with August 9 set as the deadline.
Only original equipment manufacturers (OEMs), dealers and channel partners authorised by UK vehicle OEMs were eligible to apply for the TRQ. Applicants were also required to submit a pre-purchase agreement from the OEM specifying the number of UK-origin vehicles to be supplied during the TRQ year.
The limited uptake comes as India and the UK begin implementing one of CETA’s key market-access provisions. Under the agreement, India committed to allowing imports of 20,000 cars in the first year at preferential duties. However, with only four months remaining in the 2026 calendar year when the agreement took effect, the government has made 5,200 units available in the first phase.
The concessional duty structure represents a significant reduction from India’s standard tariffs on imported automobiles, particularly for high-end vehicles. For cars with engine capacity of up to 1,500 cc, the basic customs duty under CETA has been reduced to 50% from 66%.
For petrol cars with engine capacities above 1,500 cc but below 3,000 cc, and diesel cars above 1,500 cc but up to 2,500 cc, the duty has also been fixed at 50%, compared with the 66% rate applicable to imports from countries without such preferential access.
The sharpest concession is for larger vehicles. Customs duty on petrol cars with engine capacity above 3,000 cc and diesel cars above 2,500 cc has been reduced to 30% from 110% under the CETA preferential regime.
The government has also opened a separate quota for motor vehicles for the transport of goods, under which imports can enter at a concessional duty of 37% instead of 44%. However, no applications were received for this category in the first round.
The low utilisation of the initial car quota could provide an early indication of how quickly UK automobile manufacturers and their Indian distribution networks seek to use the preferential access created by CETA. The response will also depend on manufacturers’ ability to meet the agreement’s origin requirements and on the pricing advantage created by the lower customs duties.
TOPICSIndia UK FTAThis article was first uploaded on September sixteen, twenty twenty-six, at six minutes past six in the evening. © The Indian Express (P) Ltd