DGFT Releases Procedure for Motor Vehicle Import @50% Duty in Year 1 under Indo-UK CETA

·         Quota to be Released Only to UK OEM and their Agents in India

Key Highlights

·         TRQ available only to UK OEMs and their authorised dealers/channel partners in India.

·         Imports under the TRQ will enjoy concessional customs duty, subject to annual quota limits.

·         Importers must apply online through the DGFT Import Management System (TRQ module).

·         A Certificate of Origin issued by the UK authority is mandatory at the time of import.

·         Applicants must submit a pre-purchase agreement from the UK Original Equipment Manufacturer (OEM) indicating the quantity proposed to be supplied during the TRQ year.

Passenger Cars (HS 8703 – ICE CBUs)

·         Year 1 quota: 20,000 vehicles

o    10,000 vehicles above 3000 cc petrol / 2500 cc diesel – 30% customs duty

o    5,000 vehicles (1500 cc–3000 cc petrol / up to 2500 cc diesel) – 50% customs duty

o    5,000 vehicles up to 1500 cc – 50% customs duty

·         Quotas increase over the initial years before gradually stabilising, while customs duty reduces to 10% over the implementation period.

Electric / Hybrid / Hydrogen Passenger Cars (HS 8703 – CBUs)

·         TRQ becomes available from Year 6.

·         Vehicles below £40,000 CIF are not eligible under the TRQ.

·         Year 6 quota: 4,400 vehicles

o    400 vehicles (£40,000–£80,000 CIF) at 50% duty

o    4,000 vehicles (above £80,000 CIF) at 40% duty

·         Duty gradually declines to 10% in later years, with annual quota increasing to 22,000 vehicles by Year 15.

Goods Vehicles (HS 8704 – ICE CBUs)

·         Year 1 quota: 2,500 vehicles

·         In-quota duty: 37% (against the normal base rate of 44%)

·         Annual quota increases to 3,500 vehicles, while in-quota duty reduces to 8.8% from Year 5 onward.

Allocation Method

·         If applications are within the available quota, applicants receive the quantity requested.

·         If applications exceed the quota, allocation will be made proportionately based on the quantities requested in the OEM pre-purchase agreements.

·         DGFT may reduce future allocations where an importer significantly under-utilises an earlier allocation.

Operational Provisions

·         TRQ applications will be invited through separate DGFT Public Notices.

·         The TRQ year will follow the calendar year (1 January–31 December).

·         TRQ authorisations will be issued electronically and transmitted to the Indian Customs EDI System (ICES).

·         Imports can be cleared only after electronic debit of the TRQ in ICES.

·         TRQ certificates remain valid for 12 months or until 31 December of the relevant calendar year, whichever is earlier.

·         DGFT may review the allocation mechanism from calendar year 2028 and modify the procedure in the public interest.

 

[DGFT Public Notice No. 19 /2026-27 dated 09 July, 2026]

Effect of this Public Notice: Procedure for allocation of Tariff Rate Quotas (TRQ) under India-UK (CETA) is notified.

Subject: Amendments under Para 2.92 and Appendix-2A of Handbook of Procedure 2023 for inclusion of TRQs under India -United Kingdom Comprehensive Economic and Trade Agreement (CETA).

In exercise of powers conferred under paragraph 1.03 read with 2.04 of the Foreign Trade Policy 2023, as amended from time to time, the Directorate General of Foreign Trade hereby amend s Para 2.92 and Appendix-2A of the Handbook. of Procedure, 2023 to incorporate the items mentioned and related provisions for Tariff Rate Quota (TRQ) under India - United Kingdom (UK) Comprehensive Economic and Trade Agreement (CETA) as follows -

1. Para 2.92 of the HBP, 2023 is amended to include the following annual Import TRQs under India-UK (CETA)-

(1)(a)

ICE-Passenger Car (HS8703)-Completely Built Units (CBU)

 

 

 

Year

more than 3000 cc petrol and more than 2500 cc diesel

From 1500 cc (petrol) to (and incl.) 2500cc (diesel) / 3000 cc (petrol)

Upto (and incl.) 1500 cc

 

 

 

Total Quota

In-quota tariff (Base rate of customs duty - 110.0%)

Quota Size

ln-quota tariff(Base rate of customs duty - 66.0 %)

Quota Size

In-quota tariff (Base rate of customs duty - 66.0%)

Quota Size

1

30.0%

10,000

50.0%

5,000

50.0%

5,000

20,000

2

25.0%

12,500

40.0%

6,000

40.0%

6,000

24,500

3

20.0%

15.500

30.0%

7,000

30.0%

7,000

29,500

4

15.0%

18,500

20.0%

8,000

20.0%

8,000

34,500

5

10.0%

19,000

10.0%

9,000

10.0%

9,000

37,000

6

10.0%

16,300

10.0%

8,150

1 0.0%

8,150

32,600

7

10.0%

15.200

10.0%

7,600

10.0%

7,600

30,400

8

10.0%

14,100 I

10.0%

7,050

10.0%

7,050

28,200

9

10.0%

13,000

10.0%

6,500

10.0%

6,500

26,000

10

10.0%

11,900

10.0%

5,950

10.0%

5,950

23,800

11

10.0%

10,800

10.0%

5,400

10.0%

5,400

21,600

12

10.0%

9,975

10.0%

4,988

10.0%

4,988

19,950

13

10.0%

9, 150

10.0%

4,575

10.0%

4,575

18,300

14

10.0%

8,325

10.0%

4,163

10.0%

4,163

16,650

15 and onwards

10.0%

7,500

10.0%

3,750

10.0%

3,750

15,000

(b) The tariff codes to which this TRQ applies are as follows:

HS Code

87032110

87032391

87033199

87032191

87032399

87033210

87032199

87032410

87033291

87032210

87032491

87033299

87032291

87032499

87033310

87032299

87033110

87033391

87032310

87033191

87033399

(Il)(a)

Electric/Hybrid/Hydrogen-Passenger Cars(HS8703)-CBU

 

Year

Below£40,000 CIF

£40,000CIFto £80,000CIF (inclusive)

Above£80,000CIF

 

Total Quota

In-quota tariff

Quota Size

In- quota tariff (Base rate of customs duty - 110.0%)

Quota Size

In- quota tariff (Base rate of customs duty - 110.0%)

Quota Size

6

No

Nil

50.0%

400

40.0%

4,000

4,400

7

No

N il

40.0%

600

30.0%

6,000

6,600

8

No

Nil

30.0%

800

20.0%

8,000

8,800

9

No

Nil

20.0%

1,000

15.0%

10,000

11,000

10

No

Nil

10.0%

1,200

10.0%

12,000

13,200

11

No

Nil

10.0%

1,400

10.0%

14,000

15,400

12

No

Nil

10.0%

1,550

10.0%

15,500

17,050

13

No

Nil

10.0%

1,700

10.0%

17,000

18,700

14

No

Nil

10.0%

1 ,850

10.0%

18,500

20,350

15 and later years

No

Nil

10.0%

2.000

10.0%

20,000

22,000

(b) the tariff codes to which this TRQ applies are as follows:

HS Code

87034010

87035030

87036090

87038010

87034030

87035090

87037010

87038030

87034090

87036010

87037030

87038090

87035010

87036030

87037090

87039000

(III)(a)

ICE-Goods Vehicles (HS-8704)-Completely Built Units

Year

In-Quota Duty (Base Rate-44.0%)

Out-of-Quota Duty (Base Rate--44.0%)

Quota Size

Year!

37.0 %

41.8%

2,500

Year2

29.9%

39.6%

2,750

Year3

22.9%

37.4 %

3,000

Year4

15.8%

35.2 %

3,250

Year5

8.8%

33.0 %

3,500

Year6

8.8%

30.8 %

3,500

Year7

8.8%

28.6 %

3,500

Year8

8.8%

26.4 %

3,500

Year9

8.8%

24.2 %

3,500

Year l 0 and onwards

8.8%

22.0%

3,500

(b) the tariff codes to which this TR Q applies are as follows:

87041010

87042200

87043100

87042100

87042300

87043200

2.    Import would be subject to the relevant Ministry of Finance (Department of Revenue) Notification (as amended from time to time) relating to India-UK (CETA).

3.    At the time of clearance of the import consignment, the importer in India must produce a Certificate of Origin issued by concerned authorities i n UK.

4.    The application window for submission of IRQ applications, for each calendar year, will be intimated through a separate Public Notice from time to time.

5.    All application s for grant of TRQ authorizations shall be submitted online through the DGFT website (https://dgft.gov.in )--+ Import Management System ---+ Tariff Rate Quota (TRQ).

6.    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.

7.    To be eligible, each applicant shall submit a pre-purchase agreement issued by an Original Equipment Manufacturer of the vehicles originating in the UK setting out the quantity of vehicles agreed to be supplied to the applicant during the TRQ year for importation into India under each TRQ.

8.    If the total quantities applied for are below the total available quantity under a given TRQ, each eligible applicant for that TRQ shall be allocated the requested quantity, and the remaining available quantity shall be made available for filing of applications.

9.    If the total TRQ quantities applied for exceed the total number of vehicles that may be imported under the relevant TRQ, the TRQ quantities shall be allocated among all eligible

applicants in proportion to the quantity that each eligible applicant has requested on the basis of the pre-purchase agreement.

10.  When an importer fails to import a significant share of the quantity allocated to it in a TRQ year, the competent authority shall, in determining that importer's allocation for the subsequent TRQ yeartake such under-utilization into account so as to ensure effective utilization of TRQ.

11.  The year in respect of these imports will be the period from lst January to 31st December, i.e., calendar year in India.

12.  DGFT shall monitor the cumulative quantities for TRQ Certificates issued. No TRQ Certificates shall be issued once the stated TRQ quantity limit is reached.

13.  The TRQ issued by DGFT shall contain the name and address of the importer, Importer - Exporter Code (IEC), Customs notification number, tariff item as applicable, quantity and validity period of the TRQ.

14.  The TRQ Authorisation shall be issued electronically by the Directorate General of Foreign Trade and transmitted to Indian Customs EDI System (lCES).

15.  Imports against the TRQ shall be allowed only upon debiting electronically in the ICES system.

16.  TRQ Certificate shall be valid for a maximum period of 12 months or till the end of the calendar year, whichever is earlier. The imports against a TRQ Authorisation may be cleared from Indian Customs only within the stated validity of the TRQ Authorisation.

17.  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.

18.  The above modalities of the TRQ allocation may be subject to review after 2 years, i.e., from the calendar year 2028, and any necessary revisions may be made to ensure the effective utilisation of the TRQ.

19.  Procedure for application for imports under TRQ under India-UK (CETA) as enumerated above shall be inserted under Annexure VI of Append ix 2A of the Handbook of Procedures 2023.

20.  DGFT reserves the right to modify, amend. relax, or prescribe additional conditions relating to the allocation and administration of the TRQ, as may be considered necessary in the public interest.

Issued from File No. 01/89/180/ l10/AM-25/PC-2(A)/E-45719]