India has a policy of encouraging the use of locally made cars, to create employment and help the country's industries to grow. However, the Export Import Policy of 2001 allows importation of used cars. The rules state that cars can only be imported from other countries after getting an import license. A person who is coming to India on a transfer of residence after staying in a foreign country continuously for two years does not have to get an import license.
Determine whether the car you want to import into India qualifies as a used car. According to the government of India, a used car is defined as a car that has been sold, leased or loaned prior to importation into India or has been registered for use in any country according to the laws of that country. A used car should not be more than three years old. It should have right hand steering and controls, except for vehicles that are two or three wheelers. It should also have a speedometer indicating the speed in kilometres per hour and have lighting characteristics to suit "keep left traffic," which is the traffic system in India.
Submit the paperwork to comply with India's Motor Vehicle Act 1988 on the date it is being imported. You must submit a declaration indicating how long the car will be road worthy, along with a certificate issued by a government-selected testing agency. The minimum road worthiness for used cars is five years from the importation date. You must provide assurance that service facilities will be available within the country for the five years.
Take the car for testing. The testing centres are at the Vehicle Research and Development Establishment in Ahmednagar, the Ministry of Defense, the Automotive Research Association of India in Pune, the Central Farm and Machinery Training and Testing Institute in Budni, Madhya Pradesh. You can also use any other car agencies that are approved by the central government. The testing agency will issue a certificate after the car has met all the provisions of the Motor Vehicles Act, 1988.
Present paperwork to Customs so that you can pay the duty. The Customs Department will calculate the import duty you should pay on the car based on its make and age. You can hire a customs broker to do this, as the paperwork may take a bit long in the government bureaucracy.
Write a check to Customs to pay the duty once amount has been calculated. You must pay the duty in foreign currency, so if your account in India does not have foreign currency, you may have to withdraw the money in local currency and buy foreign currency from the bank or foreign exchange bureau.
Import duty for a car in India can be as high as 180 per cent of its value, so make sure you have enough money before the car arrives in India.