Trade Agreements

India-Oman CEPA: Commitments

1. Oman’s tariff commitments
   • Vehicles: Oman’s MFN tariffs have primarily been 5% for key automobile codes (HS 8702, 8703, 8704 and 8711). Oman has committed staging category as “A” for Chapter 87, implying tariffs will be eliminated to 0% once the agreement enters into force.
   • Engines: Applicable MFN duty of 5% to be eliminated immediately once the agreement enters into force.
2. India’s tariff commitments
   • Vehicles: Relevant automobile HS codes (HS 8702, 8703, 8704 and 8711) are under the Exclusion List; hence, no tariff reduction is offered.
   • Engines: Engines are also kept under the exclusion list.
3. Rules of Origin
   • Change in Tariff Heading (CTH) + 45% Value Addition for Chapter 87.

India-UK CETA: Tariff Commitments​

India’s Commitments​

1. Passenger Vehicles:

In Quota (ICE)

• The in-quota duty for ICE Passenger Vehicles has been reduced to 10% by the 5 years.​
• Total quota units for ICE to increase from 20,000 units to 37,000 units in the 5th year and reduce to 15,000 units from 15th year onwards. The quota is spread across sub-categories based on engine size.

In Quota (EV)

• Duty reduction has also been offered for Electrified Passenger vehicles under quota (TRQ) only. Duty under quota to be reduced from 6th year to 10% by the 10th year for vehicles above £40,000 CIF. Different volume of quota units has been offered for vehicle value between £40,000 CIF to £80,000 and above £80,000.​
• Total quota units for Electrified PVs to start from 4,400 units in the 6th year and increase to 22,000 units from 15th year onwards.

Out of Quota (ICE)​

• The out of quota duty reduction for ICE Passenger Vehicles above 1500 cc has been reduced from to 50% in 10 years and for engine size upto 1500 cc has been reduced to 45% in 10 years.

2. Two Wheelers: ​

• Duty Reduction from 55% to 22% by 10th year for all categories of ICE Two Wheelers.

3. Commercial Vehicles (Buses and Trucks):

In Quota (ICE)

• The in-quota duty reduction for ICE Trucks to reduce to 8.8% in 5 years.
• The quota units to increase from 2,500 in the 1st year to 3,500 units in the 5th year and retained thereafter.

Out of Quota (ICE)

• The out of quota duty for Trucks to be reduced to 22% in 10 years. Duty reduction for ICE Buses has only been given for out of quota. Duty for ICE Buses to reduce to 22% in 10 years.

4. Engines:

• Petrol Engines: Duties to be eliminated to zero by 7th / 10th year.
• Diesel Engines: Duty to reduce to 8.25% by 5th year.

5. Exclusions by India (no duty reduction offered):

• Second hand vehicles, Three wheelers, CKD & SKD units of all vehicle categories and Electrified vehicles under Two Wheelers, Trucks and Buses.

UK’s Commitments​

• The UK has also eliminated its duties for all categories of vehicles except for Electrified Passenger Vehicles where duties have been reduced under quota (TRQ) only.

India-UK CETA: Rules of Origin​

1. Passenger Vehicles​

• Value addition of no less than 35%.
• Build- up or Build-Down method for calculating the regional value content– both can be used.

2. Two Wheelers​

• 50% of value addition at Ex-works price if under Build Down Method, or​
• 55% of value addition at FOB price the build-down method, or​
• 40% of value addition at either the ex-works price or free-on-board value under the build-up method​

3. Trucks & Buses

• CTH and Value addition of 45% of the ex-works price under the build-down method; or​
• CTH and Value addition of 50% of the free-onboard value under the build-down method, or​
• CTH and 40% of either the ex-works price or free-on-board under the build-up method

4. Engines

• CTH; or No change in tariff classification required, provided there is a QVC of not less than:
• 50% of the ex-works price under the build-down method; or​
• 55% of the free-onboard value under the build-down method; or
• 45% of either the ex-works price or free-on-board value under the build-up method​

India-UK CETA: Rules of Origin​

1. Passenger Vehicles​

• Value addition of no less than 35%.
• Build- up or Build-Down method for calculating the regional value content– both can be used.

2. Two Wheelers​

• 50% of value addition at Ex-works price if under Build Down Method, or​
• 55% of value addition at FOB price the build-down method, or​
• 40% of value addition at either the ex-works price or free-on-board value under the build-up method​

3. Trucks & Buses

• CTH and Value addition of 45% of the ex-works price under the build-down method; or​
• CTH and Value addition of 50% of the free-onboard value under the build-down method, or​
• CTH and 40% of either the ex-works price or free-on-board under the build-up method

4. Engines

• CTH; or No change in tariff classification required, provided there is a QVC of not less than:
• 50% of the ex-works price under the build-down method; or​
• 55% of the free-onboard value under the build-down method; or
• 45% of either the ex-works price or free-on-board value under the build-up method​

India-EFTA TEPA: Tariff Commitments

India’s Commitments​

Tariffs will be reduced for some categories of Engines, as per the following:​

• All petrol engines for Motor Cars have been kept under Exclusion list by India.​
• Tariffs for Two-Wheeler Petrol engines upto 50 cc will be eliminated in phases till the 10th year.​
• Tariffs for Two-Wheeler Petrol engines from 50 to 1000cc will be reduced by 50% (from the current tariff) in 15th year starting from the 6h year of the agreement for Iceland & Norway.
• Tariffs for Two-Wheeler Petrol engines from 50 to 1000cc will be reduced by 50% (from the current tariff) in 10th year starting from the 6th year of the agreement for Switzerland.​
• Tariffs for Diesel engines greater than 250 cc will be eliminated in phases till the 10th year

EFTA States’ Commitments: All applicable customs duties will be brought down to zero by the EFTA States for India

India-EFTA TEPA: Rules of Origin​

Rules of Origin/Product Specific Rules :​

• For Parts and Accessories, the qualifying criteria would be Change in Tariff Heading (CTH) or Value of Non-Originating Material should not be more than 50%.​
• For all other HS codes under chapter 87: Change in Tariff Sub-Heading (CTSH) and Value of Non-Originating Material should not be more than 50%.

India-UAE CEPA: Tariff Commitments

• UAE’s Commitments to India

  • MFN Tariffs in the UAE’s schedule: Primarily 5%​
  • Tariffs as per UAE’s Tariff Lines to become 0% once the agreement enters into force (tentative from 1st May 2022)​

• India’s Commitments to UAE ​

• HS 8702 and 8703: Exclusion list ​
• HS 8706: Immediate Tariff Elimination
• For HS 8711:
  • Two Wheelers from 50cc to 250cc: Exclusion List​
  • For Two Wheelers > 250cc : Phased Tariff reduction in 10 years​
  • CBU import duty rates: Reduction from the existing 50% to 45% in the first year and to 25% over a period of next 10 years​
  • Import duty of CKDs for > 250cc: Reduction to 7.5% from 15% / 12.5% from 25%, as applicable

India-UAE CEPA: Rules of Origin​

• Value Addition Criteria for PSRs

• PSR for Chapter 87:CTH + VA 45% and for 8716: CTSH + VA 40%
• De-minimis or Tolerance Rule: Not More than 10%
• Bilateral Cumulation: Originating Products from the territory of a Party to be considered as materials originating in the territory of the Other Party.