Under the Free Trade Agreement, India will reduce import duties on fully imported cars to as low as 10 per cent, subject to quotas.
Under the agreement, for CBU cars having petrol engines larger than 3,000 cc & diesel engines larger than 2,500 cc, the import duty is down to 30 per cent (first year) & subsequently reduced by 5 per cent each year till it reaches 10 per cent in the fifth year.
The lowered tax rates are only applicable to 10,000 units in this specific category for the first year, rising to 19,000 units in the fifth year before steadily declining to 7,500 units in the fifteenth year & beyond
For vehicles with lower-displacement engines, the rate of duty will be reduced from 66per cent to 50 per cent in the first year and declining to 10 per cent by the fifth year, dependingon the unit caps.
They will see no direct tax benefits till the sixth year, with vehicles with a Cost Insurance and Freight (CIF) value of under £40,000 (Rs 46.5 lakh approx) excluded entirely
Premium luxury car brands like Aston Martin, Rolls-Royce, Bentley and JLR will be the primary beneficiaries of the scheme.