INTRODUCTION

• Two-wheelers are one of the most versatile forms of transportation.

• The Indian auto industry is one of the largest in the world.
• The industry accounts for 7.1 % of the country's Gross Domestic
Product (GDP).
• The Two Wheelers segment with 80 % market share is the leader of
the Indian Automobile market owing to a growing middle class and a
young population.
• The growing interest of the companies in exploring the rural markets
further aided the growth of the sector.
• India is also a prominent auto exporter and has strong export growth
expectations for the near future.
• The sales of two wheelers grew by 6.89 %, during the period April-
March 2017.
• However, the exports of Two Wheelers declined by (-) 5.78 % in April-
March 2017 over April-March 2016.
History of Two wheeler industry in India
Period of Entry 1955-1969

Period of Entry 1970-1980

Period of Entry 1981-1990

Period of Entry 1991-2000

STATISTICS
 Government initiatives
• The Government of India encourages foreign investment in the automobile sector and allows 100 per
cent FDI under the automatic route.
• Some of the major initiatives taken by the Government of India are
• Government is planning to introduce biofuel vehicles for road and water transportation. India needs
to cut fossil fuel imports and look for alternative and cheaper fuels like methanol.
• Government of India extended support to the industry by increasing custom duty on CBUs of
commercial vehicles from 10 per cent to 40 per cent and reducing duty on chassis for ambulance
manufacturing from 24 per cent to 12.5 per cent.
• The Government of India plans to introduce a new Green Urban Transport Scheme with a central
assistance of about Rs 25,000 crore (US$ 3.75 billion), aimed at boosting the growth of urban
transport along low carbon path for substantial reduction in pollution, and providing a framework for
funding urban mobility projects at National, State and City level with minimum recourse to budgetary
support by encouraging innovative financing of projects.
• Government of India aims to make automobiles manufacturing the main driver of ‘Make in India’
initiative, as it expects passenger vehicles market to triple to 9.4 million units by 2026, as highlighted
in the Auto Mission Plan (AMP) 2016-26.
• The government has formulated a Scheme for Faster Adoption and Manufacturing of Electric and
Hybrid Vehicles in India, under the National Electric Mobility Mission 2020 to encourage the
progressive induction of reliable, affordable and efficient electric and hybrid vehicles in the country.
Importing luxury cars and bike in India
• Since past decade there has been a huge leap in our automobile sector with the most expensive
rides from renowned manufacturers like Ferrari, Ducati, Lamborghini, MV Agusta, Bentley, Rolls
Royce have been launched officially in India by the manufacturers themselves either
independently or with joint ventures.
• For example, the Indian company DSK group and Italian Bike makers Benelli have their JV as DSK-
Benelli for selling their bikes in India.
• Demergers have also been observed when a new brand acquired a strong popularity in India like
recent Kawasaki and Bajaj demerger.
• Moreover, our government insists on manufacturing the automobile locally and discourage
assembling it locally.
• Assembly is done via CKD route (completely knocked down) which means bringing a vehicle into
parts and assembling it or as a CBU (Completely Built Units) which means a completely built
vehicle in one piece.
• The latter has the maximum import duty and taxes while the former has a little bit of relaxation.
• Import duty for the Cars is total of whooping 165% of the CIF value (Cost+freight+Insurance) and
for the bike it is a bit less at 116% of the CIF value.
• Additionally, registration with the RTO will also apply as applicable by the State Government.
Rules and Regulations for Importing two wheelers
in India
The procedures and legalities and pre-requisites involved which are as follows-
1. New imported vehicle means-
A. Which is not manufactured in India
B. Which has not been loaned, leased or sold before importation to India
C. Which has not been registered to any country according to the laws of that country before
importing to India.
2. The units of the speedometer should be in metric units rather than Imperial unit (KM/h instead
of MP/h)
3. The car should be Right Hand Drive which means the steering and controls should be on the
right-hand side of the car.(not applicable for bikes)
4. Headlamps should suit the “keep left” traffic.
5. It should be imported from the country of the manufacturer. In case the manufacturer’s
country is an inland country and the vehicle are stored in some other country for purpose of
export by the manufacturer like a warehouse then it will be deemed to be exported from
manufacturer’s country provided that there are sufficient sources and document with the
manufacturer required to track the shipment of the vehicle from exporting country to
importing country.
6. The vehicle should be in conformity with provision and rules of Motor Vehicle Act 1988.
Contd….
7. If imported by an importer or dealer,
• (Homologation Process) at the time of importation certificate of compliance with rule 126 of
Central Motor Vehicle Rules, 1989 issued by any of the testing agencies. Which means Road
Worthiness Certificate issued by any testing agency.
• The Importer shall be responsible for all the provisions assigned to the manufacturer as per
Rules 122 & 138 of CMVR, 1989.
• Give an undertaking in writing that the proof of compliance to the conformity of production
as per Rule 126A of CMVR shall be submitted within six months of the imports. In the case of
failure to do so, no further import of new vehicle of that model shall be allowed thereafter.
8. The import is permitted through the custom ports of Nhava Sheva, Kolkata,
Chennai, Delhi Air Cargo, Mumbai Port, ICD-Tughlakabad, Cochin.
9. The above condition no.1 and 2 of the notification would not apply in below-
mentioned circumstances to this category of importers-
A. For the purpose of Defence Requirements.
B. For for the purpose of R&D by vehicle manufacturers.
C. NRIs through The Transfer of Residence Scheme if, Individuals coming to India for
permanent settlement after two years continuous stay abroad provided the car has been
in the possession of the individual for a period of minimum one year abroad.
D. The Car won as an award in some competition/match/event by Indian Resident.
E. The Car was owned by the deceased relative residing abroad and brought back by legal
heirs/successors.
F. Differently Abled persons.
Contd…
G. Any religious/charitable institute/Trust working for a community benefit of a community
registered with Government of India subject to clearance under Foreign Contribution
(Regulation) Act,1976.
H. Foreign Embassies, Diplomats, Bureaucrats with the recommendation of the Government of
India.
I. News Reporter of foreign news agency with the approval of Government of India.
J. Indian company having a foreign participation or branch office of the foreign company in India.
10. All the categories above mentioned in point no.9 shall be in conformity with one
condition that they shall be the right hand driven cars.
11. All the categories mentioned in point no.9 shall be allowed to import max 1 vehicle
except J which are allowed max 3 vehicles.
12. Category J. in point 9 shall only be allowed to import Special Vehicles.
13. All the vehicles under point 9 are not for sale for period of 2 years as mentioned to
RTO by DGFT
14. DGFT can grant relaxation under special circumstances for above-mentioned
conditions.
15. Category H of point 9 who are exempted to pay customs duty shall be exempted from
requisite 1, 2, 3, 4 & 5, now can be sold non-privileged person through procedures of
Foreign Privileged Persons (Regulation of Customs Privileges) Rules, 1957.
When Homologation is not required?
Basically, means the certification of the vehicles to be fit to run in our conditions by the
testing agency(Emissions, road safety etc). We have testing agencies like ARAI in Pune
which certifies the cars with the certificate of roadworthiness. Imported new vehicles of
the below-mentioned category is exempted from Homologation (Certification of
Homologation process) if they are-

1. Cars with Petrol the engine capacity of 3000cc or above or Diesel engine with capacity of
2500cc or above, they are not required to go through the homologation process like ARAI
neither the importer’s duty would be held liable for provision under CMVR Act for
homologation.
2. Motorcycles with engine capacity of 800cc or above are similarly not required to go under
homologation process.
3. Vehicles with FOB or CIF(cost+insurance+freight) value of $40000 or above.

Though the vehicles exempted in the above-mentioned category still require and
certification form any AUTHORIZED TESTING AGENCY OF EU like ECE, NCAP(European
Standards of Certification); just before being exported from the origin country.
Documents required for import customs clearance
1. Bill of Entry
2. Commercial Invoice
3. Bill of Lading / Airway bill
4. Import License
5. Insurance certificate
6. Purchase order/Letter of Credit
7. Technical write up, literature etc. for specific goods if any
8. Industrial License if any
9. RCMC. Registration cum Membership Certificate if any
10. Test report if any
11. Central excise document if any
 Documents required for export
1. Commercial invoice
2. Bill of lading
3. Consular invoice
4. Certificate of origin
5. Inspection certification
6. Dock receipt and warehouse receipt
7. Destination control statement
8. Insurance certificate
9. Export license
10. Export packing list
 Export scenario of two wheelers
• Two-wheeler exports from India have contributed to over 70% of total vehicles exported
• Major markets in Latin America and Africa continued to face high inflation and currency
devaluation thereby impacting demand for vehicles exported from India.
Impact of “make in India” on two wheelers
Major investments in the automobile sector in Make in India
1. MV Agusta, the Italy-based premium motorcycle ma nufacturer, has
entered India through an exclusive partnership with Pune -based Kinetic
group with the launch of three luxury bikes, which will be sold through the
„Motoroyale‟ chain in Pune.
2. Sweden-based electric vehicle maker Clean Motion plans to invest US$ 10
million in India over the next three years in order to expand operations
including setting up of an assembly unit for its Zbee three-wheelers in the
country.
3. Japanese two-wheeler manufacturer Honda Motorcycle and Scooter India
(HMSI) has opened its fourth and world‟s largest scooter plant in Gujarat,
set up to initially produce 600,000 scooters per annum to be scaled up to
1.2 million scooters per annum by mid - 2016.
4. Mahindra Two Wheelers Limited (MTWL) acquired 51 per cent shares in
France-based Peugeot Motorcycles (PMTC).
Effect of GST on Import
• The Integrated Goods and Services Tax (IGST)
• Import of Services Under GST
• Tax returns for importers
• Exemptions

Effect of GST on Export

• Under GST, exports are treated as ‘zero-rated supplies’.