TL;DR
The India-UK Free Trade Agreement, effective July 15, 2026, will reduce import duties on UK-made cars to India under a quota system, impacting the automotive sector.
The Comprehensive Economic and Trade Agreement (CETA) between India and the United Kingdom is set to be implemented on July 15, 2026. This landmark agreement will significantly impact the automotive sector, with a key focus on reducing import duties for British-built vehicles entering the Indian market under a quota system.
Under the agreement, customs duties on certain internal-combustion passenger vehicles will gradually decrease to 10% over a period of five years. This reduction will apply within a specified quota system, allowing for the import of up to 3.78 lakh UK-made passenger vehicles over a 15-year period. The initial phase will see 20,000 passenger cars imported in the first year, peaking at 37,000 units annually by the fifth year. The CETA also provides a structured pathway for Indian manufacturers to expand exports of electric, hybrid, and hydrogen passenger cars to the UK.
