How do tariffs impact CBU (Completely Built Unit) car prices in India for 2026?

CBUs attract high customs duties, typically 60% to 100% of the CIF value depending on engine size and CIF value (e.g., above $40,000 CIF value for petrol cars with engines over 3000cc attracts 100%). This significantly increases their final on-road price compared to their international cost.

What is the customs duty on luxury cars like BMW, Mercedes, and Audi in India in 2026?

Luxury cars, often imported as CBUs, face customs duties ranging from 60% to 100% based on engine capacity and CIF value. Additionally, a 28% GST and a cess of up to 22% apply, making them considerably more expensive than in their origin countries.

How does GST and cess affect new car prices in India?

All new cars in India, whether imported or domestically manufactured, are subject to a 28% Goods and Services Tax (GST). On top of this, a compensation cess is applied, varying from 1% for small petrol cars to 22% for large SUVs, further pushing up the final on-road price.

Why are domestically assembled cars more affordable than imported ones in India?

Domestically assembled cars, often from CKD (Completely Knocked Down) or SKD (Semi Knocked Down) kits, attract significantly lower customs duties (e.g., 15-35% for kits) compared to CBUs (60-100%). This, combined with local manufacturing benefits, results in a much lower ex-showroom price.

What is the import duty on electric vehicles (EVs) in India for 2026?

CBU EVs with a CIF value of over $40,000 attract 100% customs duty, while those below $40,000 face 70%. However, the government encourages local assembly, so CKD/SKD EV kits have lower duties, typically 15-35%, promoting more affordable 'Made-in-India' electric cars.

What is the typical price difference between an imported CBU and a Made-in-India car?

The price difference can be substantial, often 50% to 150% or more, depending on the car's segment and the level of import duty. A CBU luxury car, for instance, might cost double or triple its international price after duties, GST, and cess, whereas a locally assembled equivalent would be significantly cheaper.

How do tariffs affect the on-road price of cars from dealers in 2026?

Tariffs directly inflate the ex-showroom price, which forms the base for calculating other charges like registration, insurance, and road tax. Higher tariffs mean a higher ex-showroom price, leading to a proportionally higher dealer on-road price for the buyer in 2026.