Aston Martin, Rolls-Royce And Other Premium Cars To Get Cheaper From July 15, Here's Why

Fully imported premium cars from the United Kingdom (UK), including brands such as Rolls-Royce, Aston Martin, McLaren and Land Rover, are set to become cheaper in India from July 15 as the India-UK Comprehensive Economic and Trade Agreement (CETA) comes into force.

Earlier this week, the Directorate General of Foreign Trade (DGFT), under the Ministry of Commerce and Industry, notified the tariff rate quota (TRQ) framework for vehicle imports under the agreement, allowing eligible imports at concessional customs duty rates. The public notice also sets out the procedure for allocating import quotas.

The India-UK CETA, signed last year, will take effect on July 15 after both countries completed their domestic ratification procedures. The agreement provides duty-free access for nearly 99% of India's exports to the UK and includes provisions covering goods, services and professional mobility.

Custom Duties To Come Down

For the first year, customs duty on fully built internal combustion engine (ICE) passenger cars with engine capacities above 3,000 cc (petrol) and above 2,500 cc (diesel) will fall to 30% from the current 110%. The concession will apply to an annual quota of 20,000 vehicles. The quota will increase gradually over the coming years, while the in-quota duty will eventually decline to 10%.

The notification also covers other categories of passenger vehicles and commercial vehicles, prescribing separate quotas and phased duty reductions based on engine size and vehicle type. Hybrid, electric and hydrogen-powered passenger cars are also included under the TRQ framework, with benefits beginning from the sixth year of the agreement.

According to the Directorate General of Foreign Trade (DGFT), only original equipment manufacturers (OEMs) and their authorised dealers or channel partners will be eligible to apply for quota allocations. Applicants must submit a pre-purchase agreement issued by the UK-based OEM specifying the quantity of vehicles proposed for import.

The DGFT said applications will be filed through its online Import Management System under the Tariff Rate Quota module. If applications remain within the available quota, eligible applicants will receive the quantity they seek. Where demand exceeds the quota, allocations will be made proportionately based on the quantities mentioned in the pre-purchase agreements.

The notification also requires importers to produce a certificate of origin issued by the competent UK authority at the time of customs clearance. TRQ certificates will remain valid for up to 12 months or until the end of the calendar year, whichever is earlier, and imports must be completed within that validity period. Importers have also been asked to endeavour to pass on the benefit of concessional customs duty to the final buyer or consumer.