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India’s growing economy and passion for luxury vehicles make it an attractive destination for car imports, but the process is complex due to strict regulations and high costs. Importing a passenger automobile involves navigating customs duties, GST, emission standards, and specific eligibility criteria. This guide covers the essentials for importing new and second-hand cars to India in 2025, including which vehicles are allowed, tax details, and practical tips to ensure compliance. For official guidelines, refer to the Central Board of Indirect Taxes and Customs (CBIC).
Car Import Regulations in India
India imposes stringent rules to protect its domestic auto industry and environment. Key regulations include:
- Eligibility: Anyone can import new cars, but used cars are restricted to Indian nationals or NRIs returning after a 2-year stay abroad, with the car owned for at least 1 year. .
- Right-Hand Drive: Vehicles must be right-hand drive to comply with Indian traffic laws. Left-hand drive cars are allowed only for manufacturers’ testing purposes.
- Emission Standards: Cars must meet Bharat Stage VI (BS-VI) emission norms, aligned with European standards, to ensure environmental compliance. Check emission guidelines.
- Port Restrictions: Imports are permitted only through naval docks in Mumbai, Chennai, or Kolkata.
Customs Duty and Taxes
Importing a car to India incurs significant costs due to high customs duties and taxes:
- Customs Duty: New cars with a CIF (Cost, Insurance, Freight) value over USD 40,000 face a 100% duty; those under USD 40,000 incur a 60% duty. Used cars attract a 125% duty, calculated after depreciation (up to 70% based on age). CBIC duty details.
- GST: A 28% Integrated Goods and Services Tax (IGST) applies to the CIF value plus customs duty. Electric vehicles (EVs) face a lower 5% GST to promote sustainability. GST rate details.
- Cess: A 1-22% compensation cess applies, depending on engine size and fuel type (none for EVs).
- Total Cost: The total cost can reach 150-200% of the car’s CIF value, including duties, GST, cess, and registration fees.
Note: Recent posts on X suggest India may reduce duties to 10% for select premium cars under a UK-India trade deal, pending approval. Always verify with CBIC for updates.
Which Cars Can Be Imported?
Not all cars are eligible for import due to engine capacity and compliance requirements:
- Allowed: New cars with engines under 1,000cc or over 2,500cc, and all electric vehicles. Used cars (up to 3 years old) with any engine capacity, if owned for at least 1 year by NRIs or returning residents.
- Banned: New cars with engines between 1,000cc and 2,500cc, high-performance cars like the Lamborghini Aventador and Ferrari 488 GTB (due to emissions), and left-hand drive vehicles (except for testing).
- Vintage Cars: Cars over 50 years old (pre-1975) can be imported with Ministry of Commerce approval, facing up to 256% duty.
Importing Second-Hand Cars
Second-hand cars can be imported under specific conditions:
- Eligibility: Restricted to NRIs or Indian nationals returning after 2+ years abroad, with the car owned for at least 1 year.
- Age Limit: Must be less than 3 years old from the manufacturing date.
- Roadworthiness: Requires a certificate valid for at least 5 years, issued by agencies like the Automotive Research Association of India (ARAI). ARAI certification.
- Depreciation: Customs duty is calculated after depreciation (4% per quarter in year 1, 3% in year 2, 2.5% in year 3, max 70%).
- Duty: 125% on the depreciated CIF value, plus 28% GST and cess.
The Import Process
Importing a car involves several steps:
- Approval: Obtain an import license from the Directorate General of Foreign Trade (DGFT). DGFT import guidelines.
- Documentation: Prepare documents like the original invoice, bill of lading, insurance papers, GATT declaration, and DEEC/DEPB/ECGC certificates.
- Shipping: Use a reliable shipping company to transport the car to Mumbai, Chennai, or Kolkata ports.
- Customs Clearance: Pay duties and taxes, and hire a customs agent to navigate clearance.
- Registration: Register the car at the nearest Regional Transport Office (RTO) after ARAI or CFMTTI testing for compliance with the Motor Vehicles Act, 1988.
Practical Tips for Importing
To ensure a smooth import process:
- Cost Evaluation: Factor in the CIF value, duties (60-125%), GST (28% or 5% for EVs), cess, and RTO fees, which can double or triple the car’s cost.
- Compliance Check: Verify right-hand drive, BS-VI emissions, and speedometer (kilometers) before shipping.
- Professional Help: Engage a customs clearing agent and a shipping company experienced in vehicle imports.
- Insurance: Secure comprehensive car insurance post-import to protect your investment. Check Car insurance options.
Frequently Asked Questions
What is the import duty for cars in India?
New cars with a CIF value over USD 40,000 incur a 100% customs duty; those under USD 40,000 face 60%. Used cars attract a 125% duty on the depreciated value.
Which cars can be imported into India?
New cars under 1,000cc or over 2,500cc, electric vehicles, and vintage cars (over 50 years old) are allowed. Cars between 1,000cc and 2,500cc are banned.
Can second-hand cars be imported to India?
Yes, by NRIs or returning residents after 2+ years abroad, if the car is less than 3 years old, right-hand drive, and roadworthy for 5 years.
How much GST is applied to imported cars in India?
A 28% IGST applies to the CIF value plus customs duty for most cars. Electric vehicles face a 5% GST. A 1-22% cess may also apply.
