New Delhi will reduce import duties on automotive imports to 10% from about 110% with quotas on both sides and would allow the import of 3.78 lakh units of conventional engine passenger cars from the UK at concessional customs duty in the first 15 years of the implementation of the India-UK free trade pact.
India will get access to the UK’s electric, hybrid/ hydrogen passenger cars with duty free imports to the country from the sixth year in the price segment ranging from £20,000-80,000 with total quota reaching a peak of 88,000 units from the 15th year and continuing in the subsequent years, the Directorate General of Foreign Trade (DGFT) said in a public notice.
“Only Original Equipment Manufacturers Dealers/Channel Partners duly authorised by the OEMs of vehicles originating in the UK shall be eligible to apply for the TRQ,” DGFT said in a July 9 notification, adding 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. 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 tariff-rate-quota of TRQ year.
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%. 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% from 110%. 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% from 66%.
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% from 66%, as per the DGFT.
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. “The year in respect of these imports will be the period from January 1- December 31, 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 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.