Under the Comprehensive Economic and Trade Agreement (CETA), India will reduce import duties on automotive imports from about 110 per cent to 10 per cent, with quotas on both sides.
India is allowing import of 3.78 lakh units of conventional-engine passenger cars, including those in the mass segment, from the UK at concessional customs duty during the first 15 years of the implementation of the trade pact between the two countries.
Also Read: India to allow import of 3.78 lakh UK cars at concessional duty in first 15 years of trade pact
“Procedure for allocation of Tariff Rate Quotas (TRQ) under India-UK (CETA) is notified,” the Directorate General of Foreign Trade (DGFT) has said in a public notice dated July 9.
It said that at the time of clearance of the import consignment, the importer in India has to produce a Certificate of Origin issued by concerned authorities in the UK.
“Only Original Equipment Manufacturers (OEMs), Dealers/Channel Partners duly authorised by the OEMs of vehicles originating in the UK shall be eligible to apply for the TRQ,” it added.The DGFT also said that to be eligible, each applicant will have to submit a pre-purchase agreement issued by an OEM of the vehicles in the UK setting out the quantity of vehicles agreed to be supplied to the applicant during the TRQ year.
“The year in respect of these imports will be the period from 1st January to 31st December, i.e., calendar year in India. DGFT shall monitor the cumulative quantities for TRQ Certificates issued. No TRQ Certificates shall be issued once the stated TRQ quantity limit is reached,” it said.
These certificates, it said, will be valid for a maximum period of 12 months or till the end of the calendar year, whichever is earlier.
“Importers under TRQ shall endeavour to pass on the benefit of the concessional customs duty available under the TRQ to the final buyer or consumer,” it added.
For imports from the UK to India, the quota for conventional-engine passenger cars will peak in the fifth year across specified categories of vehicles at 37,000 units, with customs duties reduction reaching a final 10 per cent. The duties will not be reduced beyond this.
In the first year, the quota for passenger cars of engine size more than 3,000 cc (petrol) and over 2,500 cc (diesel) is 10,000 units, with customs duty being reduced to 30 per cent from 110 per cent.
For cars with engine size of 1,500 cc (petrol), 2500 cc (diesel) and 3,000 cc (petrol), the quota is 5,000 units, with duty being reduced to 50 per cent from 66 per cent.
Also Read: Maruti Suzuki, M&M & Tata Motors eye UK fast lane under trade pact
In the mass market segment of engine size of up to 1,500 cc, the allowed quota of import in the first year of the pact is 5,000 units, with customs duty being reduced to 50 per cent from 66 per cent, as per the document.
A total of 20,000 units of passenger cars across the three categories will be allowed to be imported in the first year under the agreement.
India has not opened its market for vehicles priced below GBP 40,000 (CIF), ensuring complete protection for the mass-market EV segment in which India seeks global leadership through its homegrown firms like Tata Motors and Mahindra & Mahindra, besides Maruti Suzuki.
In the first five years, India has not given any concessions for electric/ hybrid/ hydrogen-passenger cars, but from the 6th year, such vehicles priced between GBP 40,000 CIF (Cost, Insurance, and Freight) to GBP 80,000 CIF (inclusive), the duties will be reduced to 50 per cent with a quota size of 400 units, while for those vehicles priced above GBP 80,000 CIF, the duties will be lowered to 40 per cent with an import limit of 4,000 units.