Importing Cars To India

Importing Cars to India by NRI


In this era of open and globalized economy, trends and fashion move seamlessly from one economy to another. In fact, India has always tended to appreciate and pick up the best trends from the western civilization, whether in the field of music, lifestyle, or food.


Car is one of the most important lifestyle trends which have grabbed the eyeballs of almost everyone regardless of their profession, educational background, and economic abilities. Therefore, India has witnessed an ever-increasing trend of importing cars across segments.


This article would discuss, in details the formalities, procedures and do’s and don’ts regarding the import of cars.


Procedure for Import of New Car or Used Car to India

Importing cars to India, both used and new cars is not a new practice. Many of us have witnessed somebody importing car to India; at least we have followed our rich sportsman doing the same. Certain guidelines and rules that we need to follow and keep in mind while importing a car to India(whether new or used) are mentioned below as a quick checklist for our readers.

  • Both the used and the new car can be imported to India without a license but it should follow Government of India guidelines regarding import.
  • For the general purpose of import, the definition of a new car includes:
  • A vehicle which has not been assembled or manufactured within the Indian Territory.
  • Such a vehicle should not have been leased, loaned, or sold before being imported to India.
  • Such a vehicle, also, should not have been registered in any country for use before importation to India.


The New Vehicle Which is Being Imported Should Also Meet Certain Quality Standards As Prescribed By The Government of India Such As:

  • It should have a speedometer which should indicate the speed in terms of a kilometer per hour.
  • It should have right-hand controls and steering for vehicles other than three and two-wheelers.
  • It should have suitable photometry technology for the headlamps such that the vehicle can use “keep left” traffic indication.
  • It should only be imported directly from the country where it has been manufactured.
  • It should conform to all the provisions of Motor Vehicles Act, 1988 as on date of import.
  • The new vehicle can only be imported through Customs port at Delhi, Kolkata, Chennai, Mumbai (Nhava Sheva), and ICD Tughlakabad Air Cargo
  • In addition, the importer of the new vehicle should possess a valid certificate of compliance issued by any certified testing agency, according to the provisions of Rule 126 of Central Motor Vehicles Rules 1989.
  • The new vehicle for import should be less than 1600 cc.


Following the above checklist, while importing cars, especially new cars to India would make the process smooth and easy.


Rules for Importing a used car to India

There are various situations where importing used cars to India is considered to be the most favorable option such as when a Non-Resident India plans to return back and keep the car he has been using all these days. We suggest the following checklist in case you plan to import used cars to India:

  • Primarily, take the help of a customs broker for the entire process which would save you on time and efforts.
  • In case you plan to sell the imported car in order to make a hefty profit, which you would surely get, please keep in mind that there is a time restriction for selling imported cars. But there are dealers and brokers who can help both the seller and the buyer in bypassing the process of registration during the two years waiting time and getting the registration done at a later date.
  • A used car can only be imported in case the Non-Resident Indian is planning to transfer residence to India.
  • There is no limit for CC of the used car in case the old and used car has been in the possession of the NRI for more than a year.


Keeping these points in mind while importing used cars to India would save both time and hassles for the NRI.


Customs Duty Rates For Importing Car To India

All imported vehicles, including the used imported cars which the Non-Resident Indian carries back while shifting base to India, needs to pay a customs duty in either foreign exchange or from their Indian bank accounts such as NRE or FCNR accounts.


While importing a car, especially a new car, the customs duty incidence totals to around 181%. However, for a used imported car, the customs duty is calculated on a depreciated price based on the age of the vehicle in consideration.


An NRI might not take advantage of using the discounted price at the time of purchase of the vehicle while calculation of customs duty. The value of the car is determined by the sales invoice of the car.



Customs duty on used imported cars to India is calculated based on the depreciation allowed depending on the age of the car. The depreciation allowed on the import of used cars for calculation of customs duty is as below:

  • 4% - for every quarter during the 1st year
  • 3% - for every quarter during the 2nd year
  • 2.5% - for every quarter during the 3rd year
  • 2% - for every quarter during the 4th year and thereafter


The maximum depreciation allowed for the calculation of customs duty on used imported cars is seventy percent depending on the price of purchase of the car.


Types of Banned Vehicle to importing (car from Dubai to India)

Cars from Dubai to India or for that matter from any corner of the world can be imported by following the checklist mentioned above. However, there are certain vehicles which are not permitted to be imported into India. These banned vehicles which are prohibited from being imported in India include:

  • Cars with engine capacity in the range of 1000-2500 cc
  • Motorcycles with engine capacity beyond 800 cc


However, two-wheelers with engine capacity ranging from 50-500 cc and motorcycles with engine capacity of more than 250 cc are allowed for imports in India.

Related Questions

Q: Are debits and credits to NRO accounts allowed freely by banks maintaining the accounts?

A: Yes, individual credits beyond rs.10,000 are however supported by documentary evidence to indicate that the funds represent legitimate dues of the account holder.

Q: Are NRIs permitted to maintain accounts in rupees or in foreign currency?

A: Accounts can be maintained by NRIs either in rupees or in foreign currency.

Q: Are the balance held by the non-resident in their NRO account repatriable?

A: The balance held in NRO accounts continue to remain non-repatriable. The deposits representing only current income (like pension, dividend, rent, interest etc.) will be permitted to be repatriated...

Q: What is the penalty for premature withdrawal of an FCNR deposit?

A: Interest in such cases is paid at one percent below the interest rate payable for the period for which the deposit has actually remained with the bank.