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# Car export from India to UK: facts, trends, markets

Syahirah Aiman
31/8/2023
22
mins

## Car export from India to UK: facts, trends, markets

It’s time to bust a myth.

We might not immediately think of India as a car-producing country, but this is about to change.

India is one the ﻿top markets for exporting﻿. Automobiles is no different. By 2026, India will ﻿rank third globally﻿ in exporting automobiles, exporting 9 out of the 50 ﻿﻿veh﻿﻿icles it manufactures every minute.

According to The International Organization of Motor ﻿﻿Vehicle Manufacturers (OICA), India ranks fourth among the top car-producing countries in the world. India churned out 4.40 million cars in 2021, behind China (26.08 million), the United States (9.17 million) and Japan (7.85 million). Indian-made cars are sturdy and handle rough roads well.

Car makers are racing to grab the lion’s share of the Indian electric car m﻿﻿arket. Now is the time for ‘Made in India' cars to shine.

##### This article at a glance

India is set to be the third-largest car-exporting country in the world, with Maruti Suzuki India Limited, Kia India and Hyundai Motor India leading the way. Their largest markets range from Mexico to UAE. We’ll go through everything that you need to know for exporting cars from India to the UK — from knowing your commodity codes to getting an EORI number.

## 3 facts about exporting cars from India

### Fact 1: Top 10 cars exported from India

According to The Economic Times, the top three Indian export car makers at the end of the 2022 fiscal year were Maruti Suzuki India Limited, Kia India, and Hyundai Motor India.

If we break down by car models, the first three spots were all dominated by cars made by Maruti Suzuki: the Dzire, Baleno and Swift.

﻿The Maruti Suzuki Dzire﻿

Dzire debuted in the top 10 ranking in 2022 and overtook all other models to take first place. The Maruti Suzuki model recorded a whopping 301% export growth compared to the previous year.

The next two spots were dominated by Maruti Suzuki cars, namely the Baleno and Swift. 45,332 Balenos and 32,862 Swift cars were exported in 2022. Maruti Suzuki had another model at the ninth spot, its S-Presso.

In the fourth spot was Kia Seltos, with 31,793 exports. Hyundai took fifth (Verna), seventh (Creta) and tenth (Grand i10) places. Volkswagen and Nissan held the last two spots in the top 10, with their Vento and Sunny at sixth and eighth places.

Rank OEM Model Exports in FY22 Exports in FY21% growth 1 Maruti Suzuki Dzire 48,047 11,985 300.9 2 Maruti Suzuki Baleno 45,332 20,859 117.3 3 Maruti Suzuki Swift 32,862 13,030 152.2 4 Kia Seltos 31,793 32,201 -1.3 5 Hyundai Verna 31,099 31,635 -1.7 6 Volkswagen Vento 30,603 25,011 22.4 7 Hyundai Creta 29,747 24,151 23.2 8 Nissan Sunny 29,663 28,504 4.1 9 Maruti Suzuki S-Presso 27,322 21,939 24.5 10 Hyundai Grand i10 23,877 18,561 28.6

### Fact 2: Volume of export vehicles from India

Passenger vehicle exports from India saw a jump of 43% in FY22 compared to FY21. 577 875 units were exported from India in FY2022, out of 3,650,698 total passenger vehicles produced. That means India exported almost 19% of all cars it manufactured! In FY21, it sold only 404,397 vehicles abroad, bearing the brunt of the 2019 economic slowdown and the 2020 coronavirus pandemic.

### Fact 3: Indian car exports markets

The Observatory of Economic Complexity website reported that in 2020, India exported USD 4.7 billion worth of cars. These are the primary Indian car export markets:

1. Mexico ($ 986 million)
2. United States ($ 770 million)
3. Saudi Arabia ($ 565 million)
4. South Africa ($ 487 million)
5. United Arab Emirates ($ 228 million)

### Trends in the export of cars in India

India’s automobile industry will rank top three globally in engineering, technology, production, and exports by 2026. The automobile sector is predicted to boost India’s GDP by 12% and create 65 million jobs. Transitioning from fossil fuel to complete electrification of cars dominates Indian government discussions.

For India to achieve this, new materials must be used to manufacture electric cars, and resources optimised. They would also have to invest more in obtaining green standards and high-efficiency certifications. More importance is predicted to be placed on car maintenance and after-sales services.

Importers and exporters should take note of these trends. You could be the link in importing sophisticated car accessories, fulfilling Indian consumer demand. Or, you identify new markets interested in acquiring Indian-made electric cars.

### Exporting cars from India to the UK

﻿Steps to bring goods into the UK from any country﻿Generally, the above steps outline how to import goods into the U.K. from any country, including India.

If you are a commercial dealer importing cars from India into the U.K., ensure that you have these documents in order:

- Bill of Sale
- Certificate of Title copy
- Commodity Codes

Customs authorities use commodity codes to identify the goods you bring into the U.K. according to their product types. Commodity codes dictate the rate of duty and tax you have to pay and sift goods which adhere to legal and safety laws.

- ﻿﻿﻿VAT Registration Number﻿

Businesses with a taxable turnover exceeding £85,000 annually must register for VAT. VAT registration is optional for companies with less than £85,000 yearly turnover. VAT, or Value-Added Tax, is the tax charged by VAT-registered businesses on almost all products and services sold in the United Kingdom.

The United Kingdom’s Driver And Vehicle Licensing Agency (DVLA) has the V55/2 scheme for authorised VAT-registered commercial traders. Non-VAT-registered businesses importing from India (and outside the EU) need to fill in specific customs forms, and you can find more details here.

- EORI Number

The Economic Operator Registration and Identification number is a code for tracking and registering customs information in the EU and the U.K. Online registration for an EORI takes a few days. You still need an EORI when using a courier or freight forwarder service.

Do you need ﻿export tips﻿? Check out this article.

## What is a VAT qualifying car for exporting?

A VAT qualifying car is one that is brand new or has previously been owned by a business and used for business purposes only (as a test drive car for example). Other vehicles can also qualify, like motorbikes, motorhomes, caravans.

The car must not have been registered to a private individual at a private address throughout the entirety of its use.

## India to UK car import duty and VAT rates

Cargo imported to the U.K. is charged both VAT and import duty.

Cars imported into the UK from outside the European Commission are subject to 10% import tariffs, calculated on the bill of sale (buy price) and freight costs. VAT is a percentage of the total cost of goods, freight costs, and duty paid. The standard VAT rate is 20%. Some new car models enjoy zero per cent duty.

## How much does it cost to import a car from India to UK?

You can pay an importer or shipping company to do the hard work for you, with prices varying between companies. On average, the cost to ship a car to the UK from major worldwide ports is between $ 11﻿﻿50 to $ 2195 USD with estimated transit time being 35-40 days from the main port of Nhava Sheva.

The shipping amount will also depend on the type of car (a long wheelbase Land Rover will set you back more than a Renault Clio!) and the age, as well as the amount of traffic moving to or from India and the UK during the time you wish to ship the vehicle.

Aside from the obvious costs of shipping, you will be expected to pay VAT and duty too. VAT is charged on the total cost of the vehicle, as well as the accessories you bought with it, delivery and extra charges and duty.

Import duty can be anywhere from 5-10% and VAT tends to be a flat rate of 20%. This can vary depending on the age though, with vehicles over 30 years old potentially eligible for import duty relief and reduced rate of VAT.

You may also be exempt, or qualify for a lower rate, if you previously owned the vehicle in the UK or are returning an exported vehicle. The UK Government websit﻿﻿e lays all of this out in great detail, as well as the steps to take when telling HMRC about the importation.

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## FAQ

### How do I tell DVLA I sold my car for export?

To inform the Driver and Vehicle Licensing Agency (DVLA) that you have sold your car for export, you can follow these steps:

Complete the relevant sections of the vehicle registration certificate (V5C):

﻿﻿

- On section 6, fill in the "new keeper or trader details" with the details of the person or company to whom you sold the vehicle.
- On section 9, tick the box that says "sold or transferred to a motor trader, insurer or dismantler."
- Sign and date the declaration in section 8.

Send the completed V5C to the DVLA:

- Detach the section titled "Notification of sale or transfer" (V5C/2) from the V5C.
- Send the V5C/2 to the DVLA at the address provided on the form.
- It is advisable to send the document via recorded or tracked mail to ensure delivery.

Keep a record of the sale:

- Retain a copy of the completed V5C/2 form for your records.
- Keep any supporting documentation related to the sale, such as the bill of sale or export documentation.

By notifying the DVLA of the sale for export, you are providing them with the necessary information about the transfer of ownership. This helps update their records and ensures that you are no longer held responsible for the vehicle.

### Is there import tax on cars in UK?

Import tax, also called ‘import duty,' must be paid on cars entering the UK. You won’t have to pay import tax if you have owned the vehicle for at least six months, lived outside of the UK for at least one year and are moving back to the UK permanently.

If the car is more than 30 years old you’ll pay less VAT (at 5%) and potentially no duty. This is known as the ﻿﻿﻿﻿BTI 9705 Historic Vehicles Import Relief﻿﻿﻿﻿﻿﻿ and it does require your car to pass certain criteria to make the cut.

Commercial pickup trucks could result in 22% tax duty and 20% VAT. HMRC usually deems a pickup truck as ‘commercial' if it’s not a luxury model.

If you’re only importing the vehicle into the UK for less than six months, you can complete a C11﻿﻿0 form. This means you’ll pay no tax (if the car is already registered outside of the EU and the number plates use lettering that isn’t recognisable in the UK).

The usual fees stand between 5 — 10% of duty and 20% VAT.

### Can I import a car from India to the UK?

Absolutely! You can import a car from India to UK, there’s just some steps you must take before making the commitment.

Once you’ve signed all the forms and dotted the i’s, it’s time to think about how to successfully complete the import of the car. In most cases, people choose to have a freight forwarder or customs broker to help with the process.

The main port in Mumbai provides a direct service to the UK, with the car expected to arrive in the UK in around 35-40 days. It will be longer if you’re shipping from elsewhere.

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