Importing used cars to India isn’t just a matter of buying abroad and shipping home. If you’ve ever looked into this, you know the real cost is a lot more than just the sticker price overseas. The main thing buyers need to watch out for is the steep import duty on used cars in India – a combination of basic customs charge, surcharges, cess, and GST. Here’s the thing: every rupee matters, and a mistake in calculations or paperwork could easily turn a good deal into a financial headache.
Let’s break it down and make sure you understand the rules, duties, and all the details before you go hunting for that dream car outside India.
Understanding Import Duty on Used Cars in India
When you’re importing used car to India, the government sets high barriers, mainly by making these vehicles expensive through different layers of import duty. In 2025, the basic rate for import duty on used cars in India is a massive 70% of the car’s declared value (known as the CIF value: Cost, Insurance, Freight). But this isn’t the end:
- On top of the basic customs duty, importing used car to India attracts an Agricultural Infrastructure and Development Cess (AIDC), often at 40% of the car’s value.
- Then comes the GST, calculated roughly as 50% of the cumulative total (car’s value + total customs duty + AIDC).
- Other possible surcharges or compensation cess, based on engine size or luxury segment, can push the price even higher.
Here’s what this really means: If you import a used sedan worth ₹50 lakh, expect:
- Basic Customs Duty: ₹35 lakh
- AIDC: ₹20 lakh
- GST: ₹52.5 lakh (on cumulative costs)
The final cost could easily double, so what looked affordable abroad becomes incredibly expensive as soon as it enters Indian territory.
Specific Rates and Rules for 2025
The Indian government wants to encourage local automotive manufacturing, hence the sharp hike in import duty for CBUs (Completely Built Units) – especially for used cars:
- Import duty for most second hand cars: 70%
- AIDC: 40%
- GST: 28% standard, plus compensation cess of 15 - 22% depending on engine and size
Luxury cars (with engine capacities above 1500cc or longer than 4 meters) can face an even higher effective tax , sometimes topping 150-200% of the car’s base value when all levies are included.
Eligibility and Registration Criteria
Here’s what the rulebook says for importing used car to India:
- The car must be right-hand drive.
- The used car can’t be older than three years from the date of manufacture; classic and vintage car rules are separate, with very hefty duties.
- It must have a roadworthiness certificate valid for at least five years from import date.
- Import is allowed only through designated ports – mainly Mumbai, Chennai, and Kolkata.
- The vehicle must pass compliance checks at government testing agencies for Indian safety and emission standards.
- Upon customs clearance, registration at the local RTO is mandatory, along with additional road tax and insurance.
- Only one car per person is allowed, and only specific categories of importers (NRIs returning for good, diplomats, accredited businesses) are generally permitted.
If any of these requirements aren’t met, customs will simply reject your import, or levy even steeper penalties.
The Importing Process Step-by-Step
Let’s sketch out the process for importing used car to India:
- Find and purchase the vehicle abroad, ensuring all documentation is clear and legal.
- Secure an invoice, bill of lading, insurance, purchase papers, and a valid roadworthiness certificate from approved agencies.
- Ship the vehicle via an approved port. Older, non-compliant, or left-hand drive vehicles are usually not permitted without major modifications.
- Upon arrival, submit paperwork to customs. The vehicle undergoes inspection, with duties assessed based on CIF value plus fees.
- Once cleared, registration at the nearest RTO is essential. Be ready for separate road tax and insurance costs, which could vary based on the city and state.
- Testing at accredited centers for compliance with Central Motor Vehicle Rules (CMVR), safety and emission standards, is mandatory.
- Only after all duties, taxes, testing, and registration is complete can you legally drive the car in India.
If you’re not in India at the moment (say, an NRI relocating back), you usually have a six-month window to bring your vehicle in, but you must not sell or transfer the car for two years after import.
Biggest Challenges and Hidden Costs
It’s not just the import duty on used cars in India, other fees show up:
- Testing and compliance at agencies like ARAI or VRDE, which can run into tens of thousands of rupees.
- Shipping, dock charges, insurance, customs brokers, and clearance fees.
- RTO registration charges and local road taxes – these vary wildly by state, often 10-20% or more of assessable value.
- If the car fails to meet Indian standards, modification costs, or sometimes outright rejection.
What this really means is that you need a contingency fund, time for documentation, and a clear understanding of each step.
Exceptions: Vintage and Collectibles
As of 2025, India has slightly relaxed rules for classic or vintage cars (those over 50 years old), but here’s the catch: import duty is still a staggering 256% of the car’s value. And every year, newer vintage models become eligible, but costs remain sky-high, mostly restricting these imports to high-net-worth collectors.
Should You Import?
Given the import duty on used cars in India and all the hidden costs, importing isn’t the pathway to cheap cars. For everyday buyers, imported used cars are almost always more expensive than comparable domestic models. The only exceptions are rare, collector, or specialty vehicles, or buyers prioritizing a particular make or spec not available locally.
But if you’re clear about what you want, ready for all the paperwork, and understand both the cost and regulatory requirements, importing can be a way to own a truly unique automobile. Just make sure you run through every step of the process multiple times before taking the plunge.
Also Read: Best Low Maintenance Cars in India – Costs, Tips & Checklist
Conclusion
When it comes to importing used car to India, prepare for a complex, heavily taxed pathway. The system is designed to favor domestic car production and bar cheap foreign used cars, but it does allow for individual imports if you follow the rules precisely. Whether you’re a returning NRI, a business, or a collector, understanding the layers of import duty on used cars in India is absolutely critical before committing to a purchase. Plan each step, have expert help at hand, and be prepared to pay a premium for uniqueness and exclusivity.