How to Import Foreign Cars To India

Importing a car of foreign make into India is really a nuisance. You have to move the authorities which article can help you with the process.

The basics:

The vehicle needs to be a right-hand-drive. Left-hand drive automobiles are prohibited from entering the country (except for consulates plus some other special categories). The Indian Government has entirely banned individuals importing cars whose engine capacity ranges from 1000 – 2500 cc. New Cars can be imported via the customs port at Mumbai, Calcutta and Chennai. Used cars could be imported from the Mumbai port only. Also, the car or truck cannot be over the age of 3 years (in the date of manufacture). The Exim policy of 2001 lifted quantitative restrictions on importing used cars.

How to Import Foreign Cars To India

On customs duty:

  1. The ex-factory prices are employed for calculating customs duty.
  2. The customs duty is really a standard 102.16% on new cars.
  3. The customs duty is pegged at 159.87% on used cars.
  4. Fully knocked down cars attract a customs duty of anywhere between 38 to 48%.
  5. Under the EPCG scheme, hotels / hospitality establishments are susceptible to minimal duty / taxes. However, they are subject to certain foreign exchange requirements.
  6. If you import from Europe, you will get reimbursement from the VAT (value added tax).

On transfer of residence:

The most popular way of importing an automobile to India is through the “Transfer of residence” clause, where any Indian (settled abroad) who is relocating to India can get his car along. He should have owned the car for atleast 12 months within the foreign country. Upon import, the car cannot be sold for just two years (in the date of import). The NRI importing the vehicle should have lived overseas not less than two year duration. The payment for that car must have been made abroad. The vehicle should be imported within Six months from the NRIs arrival into India. Under this scheme, the customs duty must be paid in foreign currency. If a handicapped body’s importing the car, then the customs duty may be paid in Indian rupees. Official permission is needed before selling the car in India.

Who can import:

Anyone can import a car whose value is more than USD 40000. There are no restrictions on the imports of those cars. In order most of the exotics are above that value, they can be imported freely and never necessarily on T.R. The methodology adopted by Customs authorities in assessing duty on the automobile is dependant on the ex-factory price about the date of original purchase.

Adjustments are created for:

Foreign nationals (including persons of Indian origin) married to Indian nationals, foreign nationals employed in India, branch/offices of foreign firms, companies and institutions recognized in India, companies incorporated in India having foreign/NRI equity, accredited journalists/correspondents of foreign news agencies, Indian firms executing contracts abroad, charitable and missionary institutions, physically handicapped persons and honorary Consuls of Foreign Governments.

Paperwork and Documentation required:

Cars priced more than $40,000 don’t have to undergo homologation from the ARAI. When the cars value is under $40,000, the automobile needs to be submitted for testing towards the VRDE (Vehicle Research and Development Establishment), Ahmednagar, of the Ministry of Defence or even the ARAI (Automotive Research Association of India), Pune or even the Central Farm and Machinery Training and Testing Institute, Madhya Pradesh or other notified testing agency through the Government.

The importing agency is anticipated, at the time of importation, to submit a piece of paper issued by a testing agency (notified by the Central Government) the used motor car being imported continues to be tested immediately before shipment and that the vehicle conforms to all the regulations specified in the Motor Vehicles Act, 1988. The second hand or second hand vehicle imported into India should have the absolute minimum roadworthiness for any duration of 5 years from the date of importation into India with assurance for providing service facilities within the country during the five year period. For this function, the importer shall, during the time of importation, submit a declaration indicating the period of roadworthiness according of each and every individual vehicle being imported, supported by a piece of paper from any of the testing agencies, which the Central Government may notify in connection with this.


  1. What’s listed above is exactly what the guidelines say. Please don’t say that you saw a LHD (or something like that) since these rules are broken consistently. Bribing is rampant plus some of the rules you read above might have been bypassed (unfortunately).
  2. Be wary of dealer rackets – There have been several well-documented cases of the imported car dealer manipulating the import documentation. Should the long arms of law catch up, it is the owner (and never the dealer) who’s liable to pay duties, taxes and fines.
  3. The rebadging racket is rampant to be able to be eligible for a lower custom duties. For e.g. a BMW M5 may be rebadged to some BMW 525 and thus show less invoice price.
  4. It’s better to do the hiring of a competent and reputable clearing agent who is well familiar with the process of importing an automobile. This could help you save a lot of running around and headaches.
  5. Since the customs duty on spare parts or completely knocked down kits is significantly lower, it is not uncommon to have an importer to strip an automobile (of seats, headlights, tyres etc) and document it as a CKD.


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