India to allow import of 3.78 lakh UK cars at concessional duty in first 15 years of trade pact

Business To Business, New Delhi, 18^th June, 2026:  The India–UK Comprehensive Economic and Trade Agreement (CETA) provides a phased opening of the automobile market, allowing limited imports of vehicles at sharply reduced tariffs while also creating export opportunities for Indian manufacturers.
Under the agreement:

• India will allow the import of 3.78 lakh conventional-engine passenger vehicles from the UK over the first 15 years of the pact.
• These imports will be subject to a concessional customs duty of 10%, compared with the current effective tariff of around 110%.
• The arrangement will operate through a quota system, meaning the lower tariff will apply only to specified volumes.

• India will gain access to the UK's electric vehicle (EV) and hybrid/hydrogen vehicle segments.
• From the sixth year of implementation, qualifying Indian exports in the price range of GBP 20,000–80,000 will enjoy duty-free access to the UK market.
• The quota for these exports will gradually rise, reaching 88,000 units annually by the 15th year, after which it will continue at that level.

• Consumers could gain access to a wider range of UK-made vehicles at more competitive prices.
• Competition may encourage innovation and efficiency in the domestic automobile sector.
• Indian automakers could benefit from greater opportunities in the UK's growing EV and green-mobility market.

• The agreement provides access to one of the world's largest and fastest-growing automobile markets.
• Lower tariffs could make UK vehicles more attractive to Indian buyers.

• India has protected its domestic industry through quotas and a gradual implementation schedule rather than an immediate tariff elimination.
• At the same time, the pact supports India's ambition to become a major exporter of electric and next-generation vehicles.