Luxury car enthusiasts in India are in for a windfall—starting July 15, 2026, the India-UK Comprehensive Economic & Trade Agreement (CETA) will drive down customs duties on fully imported cars from the UK, slashing them from a whopping 110% to just 30%. The game-changing tariff reduction, announced through a new Directorate General of Foreign Trade (DGFT) notification, applies to a quota of 20,000 vehicles in the first year, covering brands like Rolls-Royce, Aston Martin, McLaren, and Land Rover.
Luxury Cars Get Affordable—But Only Up to a Point
The impact is immediate and substantial. According to industry insiders, this 80-percentage-point drop in duty could translate into 20-25% price reductions for buyers, depending on the model. That means a potential saving of Rs 1-3 crore per car—a sum that’s sure to catch the attention of India’s wealthy auto aficionados. Yadur Kapur, CEO of Select Cars, which represents Rolls-Royce and Aston Martin in India, confirmed a “substantial revision in prices” is coming, though official new price lists are still awaited. “We are already seeing massive interest among our customers,” Kapur added.
Already, imported vehicles account for just 3-4% of JLR India’s sales, but that figure is expected to rise as the reduced customs duties make these marquee brands far more accessible. Dealerships report a spike in customer inquiries following JLR’s price cut announcement and news of the FTA’s rollout. However, many potential buyers are holding off on purchases until the pact officially kicks in, hoping to take advantage of the lower prices.
Quota System and Ongoing Oversight
To operationalize the new regime, DGFT has amended procedures to introduce annual import quotas—Tariff Rate Quotas (TRQs)—for both internal combustion and electric/hybrid vehicles imported as Completely Built Units (CBUs) from the UK. The cumulative TRQ issuance will be tracked electronically through the Indian Customs EDI System (ICES), ensuring transparency and compliance. After two years, in 2028, the system will be reviewed to ensure the quotas are being effectively used, with DGFT reserving the right to modify the framework as needed.
While the trade pact offers sweeping benefits for luxury car buyers and UK automakers, its impact on other sectors like steel and petroleum is expected to be limited due to existing structural barriers and safeguard measures. Nonetheless, for the elite segment of India’s auto market, July 15 marks the start of a new, more affordable era.
