SIAM Proposes Raising Import Duty on Commercial Tractors to 40%

Posted -15 July 2026 | Author: Vishakha Sharma

The Society of Indian Automobile Manufacturers (SIAM) has urged the Central Government to increase the import duty on commercial tractors and prime movers used in logistics and goods transportation from the current 10% to 40%. The industry body believes this move will help protect domestic manufacturers from low-cost imports, particularly from China.

10% Basic Customs Duty on Tractors

According to SIAM, the existing 10% Basic Customs Duty (BCD) on imported EV and ICE commercial tractors/prime movers allows foreign companies to bring in completely built units (CBUs) at lower costs without establishing manufacturing operations in India. This, it says, gives imported vehicles a price advantage over locally manufactured products.

The association has also highlighted that Indian manufacturers are investing significantly in developing commercial tractors and electric prime movers. However, the influx of cheaper imported CBUs could weaken the business case for these investments and discourage future manufacturing expansion in the country.

Conclusion

To address this concern, SIAM has recommended a uniform 40% import duty—including Basic Customs Duty (BCD) and the Agriculture Infrastructure and Development (AIDC) cess—on imported commercial tractors and prime movers. The proposal aims to create a level playing field for domestic manufacturers while encouraging investment and local production in the commercial vehicle segment.

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