FEATURE: INVESTIGATING INDIA – THE WORLD’S FASTEST GROWING CAR MARKET: INDIA REMOVES ROADBLOCKS TO IMPORT OF FOREIGN VEHICLES

The Indian Government has opened the door for the importation of foreign-made vehicles, with automobile manufacturers or their representatives now able to import up to 2,500 foreign-made vehicles per year.

Companies are also allowed to import up to 500 other vehicles, such as buses and trucks, each. The imported vehicles will have to have ‘right-hand steering control’ to meet Indian norms.

The Indian Government is highly protective of the local automobile manufacturing industry, with tariffs of more than 100 per cent on imported vehicles.

The Directorate General of Foreign Trade (DGFT) is the agency of the Ministry of Commerce and Industry of the Government of India responsible for administering laws regarding foreign trade and foreign investment in India.

Thanks to the changes, imported vehicles compliant with international standards set by the testing agencies in Europe, Japan and some other countries will be allowed to be registered in India.

Customs Duties/Taxes to be paid on import of car to India:

  • Used Cars have an import duty rate of 125%
  • Landing Charges rate is 1%,
  • Countervailing Duty rate is 30% + Countervailing Duty rate is INR20,000 (AU$384) per piece + CESS rate is 3%
  • Additional Countervailing Duty rate is 4%

Vehicles with FOB (Freight On Board) or CIF (Cost + Insurance + Freight) value of US$40,000 or above do not have to be a part of this procedure. These vehicles still require a certification from an authorized testing agency such as ECE or NCAP before export from the manufacturer’s country.

The Import Duty for luxury cars is 165% of the CIF value. For bikes, it is 116% of the CIF value. Apart from this, the registration cost with the Regional Transport Office (RTO) will also be applied by the State Government as per the state government’s tax slabs.

Procedures and Regulations to Import a Car or Bike to India:

The provisions laid by the DGFT are as follows:

  1. The imported car can only be one that:
    A. Indian companies do not manufacture
    B. Do not fall under loaned or leased or sold category before importing
    C. Are not registered with any foreign countries according to their laws before the importation process
  2. The speedometer in the car or bike must follow metric units (Km/h) instead of the Imperial unit (Mp/h).
  3. The steering and controls must be located on the right-hand side. That is, the vehicle should be Right Hand Drive.
  4. Apart from that, the headlamps must support the ‘keep left’ traffic in India.
  5. The car or motorcycle must be imported from the manufacturer’s country. If the vehicles are stored in some other nation, the importer must have sufficient sources as well as a document to track the shipment of the transported vehicle from its homeland to India.
  6. The car should obey the provision and rules of Motor Vehicle Act 1988.
  7. If the vehicle is imported via an importer or dealer, it should follow the Homologation Process. That is, the importer must obtain a Road Worthiness Certificate. The importer must also ensure compliance with various other rules, and provide written proof of compliance production specifications.
  8. The import process is only permitted through the custom ports of Delhi Air Cargo, Nhava Sheva, Mumbai, Kolkata, Cochin, Chennai, and Inland Container Depot – Tughlakabad.

Imported vehicles are exempted from the Homologation process if they belong to the following categories:

  • Cars with petrol engine having a capacity of 3000cc or above, or a diesel engine with a capacity of 2500cc or more
  • Superbikes with engine capacity of 800cc or above.

“The DGFT norm is based on the Central Motor Vehicles Rules so far as registration without local testing is concerned, so the change in the rules will pave the way for liberal import norms,” said a ministry official.

The changes are expected to allow for the import of more models of electric vehicles in order to test the appetite of the Indian market, which it is hoped would spur the manufacture of such vehicles in India.

The decision will also pave the way for new product launches by car makers such as Nissan, Toyota, Mercedes and BMW.

The policy also allows the importation of vehicle components that comply with international standards.

Leave a Reply

Your email address will not be published.