India clears 642 UK car imports under FTA tariff quota as first allocations roll out

The approvals come 63 days after CETA took effect on 15 July. (Bloomberg)AI Quick ReadIndia has approved imports of 642 cars from the UK under the tariff-rate quota (TRQ) provisions of the India-UK trade pact, according to a senior government official aware of the matter.

The India-UK Comprehensive Economic and Trade Agreement (CETA) came into force on 15 July 2026, and this approval—covering eight applicant companies, seven of which were allotted quota while one received a deficiency certificate — comes just 63 days later.The Directorate General of Foreign Trade (DGFT), the commerce ministry arm handling the process, invited applications in July for the allocation of 2026 import quotas covering fully built passenger cars and goods vehicles eligible for preferential duties. Only original equipment manufacturers (OEMs), or their authorised dealers and channel partners for UK-origin vehicles, were eligible to apply. Applicants were required to submit pre-purchase agreements specifying quantities, while shipments require a valid UK certificate of origin.

An email query sent to the DGFT, commerce ministry and UK High Commission in India seeking an immediate response remained unanswered at the time of publication.

Under CETA, India is allowing concessional-duty imports of conventional-engine, or internal-combustion-engine (ICE), passenger cars from the UK, subject to annual quantitative limits. The framework allows a cumulative 378,000 such vehicles over the first 15 years of the agreement, with tariffs on automotive imports within the quotas falling from as high as 110% to 10%.

For the first year, the annual quota stands at 20,000 ICE passenger cars, divided across engine-size categories: 10,000 units for vehicles with petrol engines above 3,000 cc or diesel engines above 2,500 cc, with duty reduced to 30% from 110%; and 5,000 units each for the mid-range category—1,500–3,000 cc petrol or up to 2,500 cc diesel—and smaller vehicles with engines up to 1,500 cc, with duty reduced to 50% from 66%.

Because the agreement took effect midway through the calendar year, the 2026 allocation is being applied on a pro-rata basis. Reports indicate a total TRQ of around 10,480 ICE vehicles for the calendar year, with an initial application window targeting roughly 5,000 units or more in the first phase.

The 642 cars cleared so far represent the first allocations under the mechanism for the remainder of the year. The annual ICE passenger-car quota is designed to rise gradually to a peak of 37,000 units in the fifth year before tapering, while duties across categories are phased down to 10%.

Separate schedules cover goods vehicles, while a TRQ for electric, hybrid and hydrogen-powered passenger vehicles begins only from the sixth year, with protections for lower-priced models to support India’s domestic EV ecosystem.

India-UK bilateral trade has continued to expand, with total trade in goods and services valued at about £48 billion in 2025, according to the UK government.

India’s merchandise exports to the UK stood at $13.44 billion in FY2025-26, while imports from the UK were $11.68 billion, according to Indian government data. Services trade was worth about $35.44 billion in 2024, with India recording a services surplus of nearly $7.9 billion.

Harsh Kumar is a policy reporter at Mint (HT Media Group), where he covers the Ministry of Commerce and Industry along with key departments of the Ministry of Finance, including the Department of Economic Affairs (DEA) and the Department of Financial Services (DFS). With over five years of experience in business and economic journalism, he has developed strong expertise in tracking policy developments and their wider economic impact.He has previously worked with Business Standard, Moneycontrol, and Outlook Money, where he reported extensively on banking, financial services, and the broader economy. Over the years, he has built a reputation for delivering accurate, insightful, and impactful stories, supported by a keen eye for detail and a consistent track record of breaking exclusive news.An alumnus of Jamia Millia Islamia, Harsh closely follows regulatory changes and key economic trends shaping India’s financial and industrial landscape. His reporting aims to simplify complex policy issues for a wider audience while maintaining depth and credibility.Outside of work, he enjoys tracking policy developments, finding scoops, and travelling, reflecting his curiosity about how economic decisions shape everyday life.

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