How to Import a Foreign Car in India: A Complete Guide

Posted on: Jan 17, 2022 | 3 mins | Written by: HDFC ERGO Team

How to Import a Foreign Car in India: A Complete Guide

When you are a car aficionado, you are likely to fall in love with a model that is amazing but not found in India. And if you are not constrained by a budget, you can bring such a car home too. However, importing cars to India can be a time-consuming and expensive process. This is why, you need to be financially sound and more, to be able to import your dream car, given the regulatory hurdles and hoops along the way. And of course, you will need a comprehensive car insurance policy for the same, strengthened further with add-ons, for holistic protection against unforeseen events.

Now, here’s what you must know when importing a car to India:

1. Conditions For Importing Cars To India

If you are planning to import a car, either a brand new car or a used car, here are some of the conditions that the car must meet.

◦ Conditions for a new car

▪ It must be manufactured or assembled in any other country, apart from India.

▪ The car must be brand new and should not be previously leased, sold, registered or rented.

▪ It must be a right-hand drive car, in which the lights primarily illuminate the left side of the road.

▪ The readings in the speedometer must be in kilometres and not miles.

▪ You can import via the naval docks in Mumbai, Chennai and Kolkata only.

◦ Conditions for a used car

▪ The car that you are planning to import must not have a manufacturing date older than 3 years.

▪ You can only import via naval docks in Mumbai, Chennai and Kolkata.

▪ The car must be fit for roads and certified for at least 5 years.

▪ The car must have been previously sold, leased, registered or rented.

▪ It must be a right-hand drive car and speedometer in kilometres.

2. Fundamental rules

• The car must be a right-hand drive. Left-hand drive cars were until recently banned from entering the country except for consulates, embassies, and other special cases. Now, you can import left-handed cars for testing and research purposes, given that left-hand drive is the norm in technologically advanced countries.

• The engine capacity of the car needs to be under 1000cc or over 2500cc, eliminating a large chunk of the market. Cars with engines under 1000cc will be low-cost, low-feature ones in their respective market, but become expensive if you consider import duty. On the other hand, cars with above 2500cc engines will be relatively high-end and expensive to begin with. If you add import duty to that, it will nearly double the cost.

• Newer cars must be imported only via the naval ports of Mumbai, Kolkata, and Chennai. Used cars, not older than three years from the date of manufacturing, can be imported via Mumbai only.

• The speedometer must display values in kilometres, not miles.

• The car can only be imported from the country of manufacturing. And it must be assembled or manufactured outside India.

3. Import duty

Cars where the CIF value exceeds USD 40,000 can attract an import duty of 100%. New cars of value less than USD 40,000 attract a 60% import duty. Used cars have an import duty of 125%. The import duty for completely knocked-down cars can range from 15-30%, depending on the body assembly.

4. Transfer of residence

Non-resident Indians (NRIs) are allowed to import one vehicle when moving back to India permanently. You must have lived in a foreign country for at least two years to undergo the ‘transfer of residence’ process. Also, this process should not have been initiated for at least three years prior to the current initiation. The vehicle cannot be sold for at least two years after the import.

5. Who can import a commercial vehicle?

• Foreign nationals (married to an Indian)/NRIs who have not resided in India for 2 years, and have registered the car for at least a year

• The legal heir of the deceased person, to whom the car has been bequeathed

• Physically challenged persons

• Business entities in India that also have foreign equity participation and vice versa

• Charitable, religious, or missionary trusts registered in India

• Any journalist accredited to the Press Information Bureau

6. Procedure to import the foreign car

If you are wondering about how to import a car in India, you must follow these steps for the same. The importer or dealer of the car should have a valid certificate of compliance, as per rule 126, of the central motor vehicle rules of 1989. The certificate must have been issued by any of the testing agencies.

The dealer or importer is responsible for all the guidelines under rules 122 and 138, that is usually assigned to a manufacturer. They are also responsible for issuing Form 22 under the CMVR, 1989.

Lastly, the importer or dealer should give an undertaking regarding the proof of compliance as per rule 126A Must be submitted within six months of the import. Failing to do so will prevent them from importing any more cars in the future.

7. Paperwork And Documentation

You can import a car directly from the manufacturer or through an agent, with the latter doing all the legwork, especially related to the paperwork. These are the documents you will need:

• Vehicle Invoice

• Car insurance policy

• GATT declaration

• Bank draft

• Bill of Lading

• Import License

• Purchase Order/Letter of Credit

• DEEC (Duty Exemption Entitlement Certificate) / DEPB (Duty Entitlement Passbook) / ECGC (Export Credit Guarantee Corporation of India) or any other specified document

Conclusion

There are plenty of amazing cars available internationally, which cannot be bought in India. If you are wondering how to buy foreign cars in India, the above steps will help you. Importing these cars can be a sensible option if you strongly want to own them. The process can seem a bit complicated. However, if you follow all the steps and have all the documents in place, you should be able to get through it without any hassles. Once imported, you will need to adhere to Indian rules such as mandatory third party car insurance.

FAQs

1. Who can import a left-hand drive car in India?

In India, only car manufacturers are permitted to import left-hand drive vehicles, strictly for testing and research purposes. These cars cannot be sold.

2. Can NRIs import cars?

Yes, NRIs who have not lived in India for at least 2 years can import their cars to India.

3. Can I import vintage cars?

Yes, you can import vintage cars to India, as long as they are manufactured on or after the 1st of January, 1950. You cannot import cars that were manufactured prior to this date.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.

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