Importing High-End Vehicles to be Made Easier in India

India may soon see a rush of top-end vehicles on its roads.

The Indian government is planning to ease its import norms to introduce globally-popular and exclusive vehicles such as electric cars and superbikes to its automotive market.

The liberalization will encourage automobile manufacturers or their authorized representatives in the country to import foreign-manufactured vehicles irrespective of its price or engine capacity. The revised norms will also remove the restriction on mandatory local testing conditions.

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However, the import duty rates on imported vehicles will remain the same. 

Currently, the Directorate General of Foreign Trade (DGFT) permits homologation free, that is, without mandatory local testing import of four-wheelers worth US$40,000 or above. While the homologation free import of two-wheelers requires the minimum engine capacity limit to be 800 cc and beyond.

Under the proposed norms, each company would be allowed to import up to 2,500 units of completely built units (CBU) or semi knocked down kits (SKD) of cars or two-wheelers, annually.

Conditions to import vehicles

According to the DGFT notification, the imported cars – including parts and components, must be compliant with internationally accepted standards such as the following

• European Economic Community (EEC);
• Economic Commission For Europe (ECE);
• International Electro-technical Commission (IEC);
• International Standards Organisation (ISO); or
• Joint Industrial Council (JIC).

The above standards must be set by the authorized certifying agency or an accredited certifying agency of the country of origin of the manufactured car, its part or component.

Further, the vehicles must have right-hand steering control to meet India’s traffic-driving rules.

Impact of new norms

The new norms will allow foreign manufacturers such as BMW, Kawasaki, Mercedes, Nissan, and Toyota to research and test their products in the Indian market. Based on consumer response, this would enable manufacturers to launch a variety of new products, and could also boost local manufacturing of foreign cars in India.

Final notification with further clarity on new norms is yet to be issued by the government.

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