India has opened the first round of applications for the allocation of 2026 import quotas for fully built passenger vehicles and commercial vehicles under the duty reduction framework of the India–UK free trade agreement.
As part of the India–UK Comprehensive Economic and Trade Agreement (CETA), which took effect on July 15, India has permitted the import of up to 378,000 conventional-engine passenger vehicles from the UK at preferential customs duty rates during the initial 15-year implementation period of the trade agreement. The quota includes vehicles across segments, including mass-market models.
Under the agreement, import duties on automobiles will be reduced from around 110% to 10%, with quota limits established for both countries.
The Directorate General of Foreign Trade (DGFT) announced that importers seeking to benefit from the tariff rate quota (TRQ) concessions for vehicles sourced from the UK can submit applications for the 2026 allocation between July 21 and August 4.
According to the notification, the first phase of the quota allocation will cover 9,316 vehicle units for eligible importers. Only original equipment manufacturers (OEMs), authorized dealers, and channel partners approved by UK-based vehicle manufacturers will be permitted to apply for the tariff rate quota. Applicants must provide a pre-purchase agreement from an eligible UK vehicle OEM specifying the number of vehicles committed for supply during the TRQ year for import into India under the concessional duty framework.
India has allocated separate quotas for different vehicle categories. For cars with engine capacity up to 1,500 cc, the quota is 2,329 units, with the basic customs duty reduced to 50% from 66%. The same quota of 2,329 units applies to petrol vehicles above 1,500 cc but below 3,000 cc, and diesel vehicles above 1,500 cc but not exceeding 2,500 cc, with duties also cut to 50% from 66%. A larger quota of 4,658 units has been set for petrol cars above 3,000 cc and diesel cars above 2,500 cc, where import duties have been reduced to 30% from 110%.
For completely built vehicles used for goods transportation, India has allocated an initial import quota of 1,164 units in the first phase. The total quota for such vehicles in the first year of the India–UK CETA implementation is set at 2,500 units. Vehicles imported under this quota will benefit from a reduced customs duty of 37%, compared with the standard 44% rate.
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