Q. What duty concessions will India give in the auto sector to Britain?India, for the first time, has given tariff concessions for the auto sector in its free trade agreement, and it’s likely to trigger similar demands from Japan, the EU, South Korea, and the US. India has opened a dedicated Tariff Rate Quota (TRQ) for passenger cars from the UK. For large-engine petrol cars above 3000 cc and diesel cars over 2500 cc, traditionally luxury imports, India has committed to lowering the current over 100 per cent customs duty to 10 per cent over 15 years, within a quota starting at 10,000 units and rising to 19,000 in year five.For mid-sized cars (1500-2500 cc diesel / up to 3000 cc petrol), a 50 per cent in-quota duty applies initially, falling to 10 per cent by year five. Small cars under 1500 cc follow a similar tariff reduction path with a growing quota. These in-quota vehicles enjoy sharply reduced duties, while out-of-quota imports still face tariffs ranging from 95 per cent to 50 per cent, depending on vehicle size and year.The TRQ marks a major policy shift, especially as India has long used high tariffs to protect its domestic automotive industry. By year five, up to 37,000 UK-built ICE (internal combustion engine) vehicles could enter India annually at just 10 per cent duty, far below the current 110 per cent.
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