India: Different Types of Cars Imported in India Today

Nissan Micra (K13)
TuRbO_J from Adelaide, Australia, CC BY 2.0, via Wikimedia Commons

Introduction

India is one of the fastest-growing car markets in the world. 

While many vehicles sold here are manufactured locally or assembled in India, a significant portion of cars—especially in the luxury, super-luxury, exotic, performance, and high-end electric vehicle (EV) categories—are imported. 

Importing cars involves navigating customs duties, tax structures, import classifications (CBU, CKD, SKD), as well as regulatory and consumer demand constraints.

This essay examines the different types of imported cars in India today: their categories, the import routes, brands and models, regulatory framework, evolving trends, challenges, and future outlook. This will help understand what kinds of foreign cars are sold in India, why they are priced as they are, and how this segment is changing.

1. Import Categories: CBU, SKD, CKD

To understand imported cars in India, it's important to know the import / assembly categories:

• CBU – Completely Built Unit: The car is fully manufactured abroad and imported as a whole. This attracts the highest import duties and taxes.

• SKD – Semi Knocked Down: The car arrives in partially assembled form; some components are assembled abroad, others in India. This reduces duty somewhat.

• CKD – Completely Knocked Down: The car is imported as disassembled components for full assembly in India. Import duties are lower than CBU and SKD, encouraging local assembly.

These categories affect what kind of models foreign automakers bring into India, how many, pricing, and viability.

Nissan Micra (K13)
TuRbO_J from Adelaide, Australia, CC BY 2.0, via Wikimedia Commons

2. Customs Duties, Tax Structures & Regulatory Constraints

Imported cars in India are subject to various duties and taxes which significantly increase their final cost. Key elements:

• Basic Customs Duty (BCD) for CBU imports is typically very high for luxury vehicles. For many CBUs, especially cars with CIF (Cost, Insurance, Freight) value over a threshold, duties are steep. Vehicles over certain engine capacities (e.g. more than 3,000 cc petrol, 2,500 cc diesel) also draw higher duty.

• Government policy has also raised duties on fully built vehicles including EVs (except in some cases) to 70%.

• SKD vehicles attract lower duty, often around 35%. CKD vehicles have still lower duty levels and sometimes benefit from lower surcharges.

• Other duties/cesses: additional surcharges, agricultural infrastructure development cess (AIDC), social welfare surcharge, GST (Goods and Services Tax), registration and compliance costs. These add substantially to cost.

All this means fully imported luxury/super-luxury cars are very expensive in India. Many manufacturers mitigate this either by offering local assembly, doing CKD/SKD, or bringing in limited CBU units.

3. Categories / Types of Imported Cars

Because of the tax structure, only certain segments justify the cost of import. Here are major categories/types of imported cars in India, as of today.

Holden SS HQ Sedan Lettuce Alone
Sicnag, CC BY 2.0, via Wikimedia Commons

(a) Luxury & Ultra-Luxury Sedans

These include high-end sedans from brands like Mercedes-Benz, BMW, Audi, Porsche, Jaguar, Bentley, Rolls-Royce, etc. 

Some models are fully built abroad and imported as CBU. 

Others are assembled locally in part and manage lower import duties via partial localization.

These sedans are feature-rich: large engine capacities, premium materials, advanced driver-assistance systems (ADAS), high technology, comfort features, prestige.

Years Porsche Sports Car, Berlin
Matti Blume, CC BY-SA 4.0, via Wikimedia Commons

(b) Performance / Sports Cars & Supercars

These are niche, typically very high price, high performance, exotic cars. Brands such as Lamborghini, Ferrari, Aston Martin, McLaren, etc. These almost always come in as CBUs. Limited numbers, often custom-ordered, with exclusivity, high power engines, bespoke interiors. Import duties make them extremely expensive in Indian market compared to many other geographies.

(c) Electric Vehicles (EVs)

Imported EVs are growing in presence among premium / luxury segments. Some EV models are imported fully built. Others may come as SKD/CKD when manufacturers or brands are willing to invest in partial assembly or local production. The duties for EV imports also follow the duty hike regimes but special policies or incentives sometimes help reduce cost.

Mahindra XUV SUV
Ank Kumar, CC BY-SA 4.0, via Wikimedia Commons

(d) SUVs and Sports Utility / Crossover Imports

Large SUVs from foreign brands—usually higher capacity petrol/diesel engines, or luxury or performance SUVs—are imported, or sometimes partially assembled. The demand for powerful SUVs, even imported ones, remains among affluent buyers.

(e) Coupe / Exotic Body Styles & Specialty Cars

Coupes, convertible cars, limited-edition models, or imported cars that serve as showcase, or for collector interest. These seldom sell in large volumes—often more about brand prestige than mass market.

(f) Vintage / Classic Cars

India has limited import of classic/vintage cars, often for personal or collector use. Sometimes legislated under special rules (vehicles older than certain thresholds allowed import). However, regulatory and duty barriers are significant.

Nissan Micra (K13)
TuRbO_J from Adelaide, Australia, CC BY 2.0, via Wikimedia Commons

4. Brands & Model Examples

Here are examples of brands and some models/types that are imported in India:

• American EV brands have begun to enter via imports, for example a well-known EV sedan/SUV launched recently. Price after heavy duties tends to be very high.

• European luxury brands continue to dominate the imported luxury sedan and SUV market: Mercedes-Benz, BMW, Audi, Volvo, Jaguar Land Rover, etc. Many of their higher end models (S-Class, 7-Series, etc.) are fully imported.

• Exotic/supercars: Lamborghini, Ferrari, Bentley, Rolls-Royce are typical names. High customs duty, small sales volume, often custom-spec or limited unit.

• Premium performance SUVs and crossovers from brands like Porsche, etc.

These imported cars often carry large markups due to import costs, taxation, modifications (e.g. right-hand drive conversion), compliance with safety/emission standards, shipping, insurance.

5. Market Trends and Demand

Official cars of 2019 European Games
DobryBrat, CC BY-SA 4.0, via Wikimedia Commons

Some of the trends in imported car market in India:

• Growth in Electric Luxury Imports: A rising number of buyers are opting for imported EVs in the premium segment, partly for status, partly for embracing new technologies. Brands are responding with showrooms, charging infrastructure, etc.

• Changing Duty Regime: In recent budgets, India has increased basic customs duty for many CBUs. Duty on CBU vehicles with CIF under a threshold in petrol/diesel, or with engine size less than some cc, has been raised to 70%. For SKD units too, duty has gone up.

• Trade Agreements Loosening Some Barriers: India-UK Free Trade Agreement has provisions that liberalize import duties on some luxury cars under quota, making some imported British premium/luxury models more affordable under certain conditions.

• Elite Buyer Core: The consumer base for imported cars remains small, but growing. Affluent, status-conscious buyers in metros, startups, film industry etc. are key demand drivers. They are willing to pay premium for foreign branding, performance, exclusivity.

• Supply Challenges & Compliance: Importing, especially CBUs, comes with regulatory compliance: emission norms, safety standards, homologation, driving side conversion, shipping logistics. Delays, duties, modifications add to cost.

6. Impact of Tariffs & Price Structure

Because of the high import duties, the final cost of imported cars is often multiple times their base price abroad. Some implications:

• Even “entry-level” imported luxury models often cost several lakhs (INR) more than similar domestically manufactured premium cars.

• Some manufacturers choose CKD/SKD routes to reduce cost burden; others limit imports of CBUs to only very high-margin models.

• High duties act as a barrier to competition, keeping luxury imports a niche. The high-end buyer is somewhat sheltered from price elasticity because exclusivity is part of appeal.

Recent budgets increased customs duty on CBUs and SKDs, including for EVs, to further protect domestic manufacturing and promote localization.

Years Porsche Sports Car, Berlin
Matti Blume, CC BY-SA 4.0, via Wikimedia Commons

7. Regional Demand Patterns

Imported car demand in India is concentrated in:

• Metropolitan cities: Mumbai, Delhi-NCR, Bangalore, Chennai, Hyderabad, Pune. These cities have more affluent buyers, better infrastructure, and higher demand for luxury & performance imports.

• Tier-2 cities are slowly seeing some growth in demand, particularly for premium SUVs and imported EVs, as incomes rise.

• Coastal regions / cities with ports often see more imports and showroom availability, simply because logistics are easier.

• Also, there is demand from collectors or enthusiasts for exotic/sports cars, limited editions, which are imported in small numbers.

8. The Role of Electric Vehicles (EVs)

EV imports in India are expanding, especially among premium brands. Some key points:

• Imported EVs are subject to the same high duty rates (70% for many CBUs under certain thresholds), which makes them expensive. However, the appeal of EVs (zero tailpipe emissions, status, technology, performance) attracts attention.

• Policy incentives, whether at centre or state level, for EVs (such as subsidies, better charging infrastructure) affect demand.

• Some foreign EV manufacturers started showrooms/import models recently. Tesla entry is one example: initially importing fully built units. The presence of imported EVs tends to push domestic players to improve technology, range, features.

9. Challenges for Imported Cars

Importing cars in India faces many barriers and challenges:

• High Import Duties & Taxes: Already discussed above; these are perhaps the biggest cost contributor.

• Regulatory Requirements: Emission norms, crash safety regulations, homologation, import certification, left-hand drive to right-hand drive (RHD) conversion etc.

• After-Sales Service and Spare Parts: Imported vehicles often require expensive spares, sometimes less availability, higher maintenance costs. Buyer confidence depends on service network.

• Resale & Depreciation: Because of high purchase cost, resale value becomes a concern. Also insurance is more expensive.

• Customs Procedures & Logistical Delays: Import process adds shipping cost, port handling, customs clearance, etc.

• Tariff Instability & Policy Risk: Sudden changes in duty or policy (like new import duty hikes) affect pricing and buyer sentiment.

10. Future Outlook

What can we expect in the coming years for imported cars in India?

• More Imported EVs: As global EV technology improves and as import duties or incentives adjust, more EV models from foreign brands are likely to enter.

• Greater Use of SKD/CKD Assembly: To reduce import burdens, more foreign brands may adopt partial or full local assembly under SKD/CKD, especially for SUV & EV models.

• More Trade Agreements: FTAs (India-UK, India-EU, etc.) can reduce duty on certain makes/models, making imports more affordable for luxury brands.

• Niche & Boutique Imports: Collector models, exotic/supercars, limited editions will continue in small numbers.

• Policy Pressure: Government may continue pushing ‘Make in India’ / local manufacturing to reduce import dependencies, so imported car segment may face stricter rules, incentives for localization.

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Conclusion

Imported cars in India represent a niche but influential segment. They carry prestige, performance, and often cutting-edge technology, appealing to affluent buyers who prioritize brand, exclusivity, and features over cost. However, because of high import duties, tax surcharges, and regulatory barriers, imported cars are expensive, only a small portion of total car sales. 

Nonetheless, changes in policy (trade deals, tax reforms), growing demand for EVs, and willingness of foreign brands to adapt (SKD/CKD) suggest that the imported car segment will continue to evolve. Buyers interested in imported cars must understand not just the nominal price, but the total cost—including import duty, tax, maintenance, and compliance.