Import Duty on Cars in India: What You Need to Know

When you buy a car in India that was made overseas, you’re not just paying for the vehicle—you’re paying import duty, a tax imposed by the Indian government on goods brought into the country. Also known as customs duty, it’s one of the biggest reasons why foreign cars cost so much more here than in their home markets. This isn’t just about revenue—it’s a policy tool used to protect local manufacturers, encourage Make in India, and control the flow of luxury imports.

The import duty on cars in India isn’t a single number—it changes based on the type of car, engine size, whether it’s fully built or assembled locally (CKD), and if it’s a luxury model. For example, a fully imported luxury sedan can face total duties over 100%, while electric vehicles get some relief under recent policy changes. The customs duty alone can be 60% to 100%, and when you add GST, compensation cess, and other charges, the final price often doubles or triples. That’s why a BMW or Mercedes that costs $50,000 in the U.S. can hit ₹1.5 crore in India.

It’s not just about the price tag. The vehicle import regulations in India also demand strict compliance—homologation, safety certifications, emissions testing, and even rules on right-hand vs. left-hand drive. These rules make it harder and more expensive for smaller brands to enter the market, which is why you see mostly big names like Mercedes, BMW, Audi, and Tesla. Smaller or newer brands often skip India entirely because the cost to comply is too high.

Why does this matter to you? If you’re thinking of importing a car yourself—whether it’s a classic, a rare model, or an EV—you need to know the full cost before you commit. Even if you’re just curious why your friend’s imported Toyota costs more than a new luxury SUV, the answer lies in these layers of taxes and rules. The Indian government isn’t just taxing cars—it’s shaping the entire auto market. And while local manufacturers like Tata and Mahindra benefit, buyers pay the price.

Below, you’ll find real posts that break down how these duties work, which cars are affected the most, why some brands left India because of them, and how policy shifts are slowly changing the game. No fluff. Just facts you can use.