New Trade Window: Auto Industry Gets Opportunity Under India-UK Agreement

India’s Directorate General of Foreign Trade (DGFT) has invited applications from automobile importers seeking to avail tariff concessions under the India-United Kingdom Free Trade Agreement (FTA). The move allows eligible importers to benefit from reduced customs duties on vehicle imports from the UK through the Tariff-Rate Quota (TRQ) mechanism.

The DGFT has opened the application process for TRQ benefits, with applications reportedly accepted until August 4. The facility is part of the Comprehensive Economic and Trade Agreement (CETA) between India and the UK, under which import duties on automotive products have been significantly reduced for vehicles brought into India within specified quota limits.

Under the agreement, India has allowed the import of up to 3.78 lakh conventional-engine passenger cars, including mass-market models, from the UK at concessional customs duty rates during the first 15 years of the trade pact’s implementation. The FTA officially came into effect on July 15, 2026, creating new opportunities for automobile manufacturers and importers from both countries.

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According to the DGFT notification issued on July 10, importers must follow specific procedures to obtain government approval for quota-based duty benefits on passenger cars and goods vehicles. Applicants will need to provide a Certificate of Origin issued by authorised UK authorities at the time of customs clearance to confirm that the vehicles qualify under the agreement.

Only Original Equipment Manufacturers (OEMs), along with dealers or channel partners officially authorised by UK-based vehicle manufacturers, will be eligible to apply for the TRQ. Applicants must also submit a pre-purchase agreement from an OEM in the UK, specifying the number of vehicles expected to be supplied during the relevant TRQ year.

The DGFT said TRQ certificates will remain valid for a maximum period of 12 months or until the end of the calendar year, whichever comes first. The agency will monitor cumulative allocations and will stop issuing certificates once the permitted quota limit is reached. Importers benefiting from the scheme are also expected to pass on the advantage of reduced customs duties to final buyers and consumers.

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