15/04/2025
Why the Same Car Costs More in India: A Closer Look at Global Price Differences
Imagine buying the same Toyota Land Cruiser LC 300 across the globe—but paying wildly different prices depending on your country. While this luxury SUV is available for just around INR 50–70 lakhs in countries like the USA, UAE, and Canada, the price skyrockets to INR 2.35 crore in India. Why does this massive difference exist for the exact same vehicle?
Let’s explore.
Taxation: The Game-Changer
The biggest reason for this pricing disparity is the difference in tax structures and import duties. In India, imported luxury vehicles attract heavy customs duties, GST, registration costs, and compensation cess. These taxes can double or even triple the car’s base price.
Breakdown in India:
Import Duty: Up to 100% for completely built units (CBUs)
GST: 28%
Cess: Up to 22% for SUVs
Registration and Road Tax: Varies by state, often 10–15%
Dealer Margin & Logistics: Adds further cost
In contrast, countries like UAE and USA offer far more lenient tax structures for vehicles, especially luxury ones. Import duties are minimal or zero, and registration is straightforward.
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Global Price Comparison (INR)
India: INR 2.35 Crore
USA: INR 70.52 Lakh
UK: INR 83.99 Lakh
UAE: INR 54.95 Lakh
Canada: INR 50.10 Lakh
The difference is stark—and shocking. Indians pay up to 3–4 times more for the same car.
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Impact on Consumers
This excessive taxation discourages middle-class car enthusiasts and limits choices for buyers. It also results in a thriving grey market and parallel imports, where people try to bring vehicles through alternate channels to avoid duties—often at legal and safety risks.
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What Can Be Done?
1. Rationalize Import Duties: Reduce CBU taxes for niche or low-volume imports.
2. Encourage Local Assembly (CKD/SKD): Incentivize brands to assemble vehicles locally to bring down prices.
3. Transparent Pricing Policy: Encourage a fair, open, and customer-friendly pricing model.
4. Road Tax Reforms: A unified, reasonable road tax across states can help reduce final prices.
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Final Thoughts
The Land Cruiser LC 300 is a symbol of power, luxury, and engineering excellence. But in countries like India, owning one comes at a price far beyond its real value—thanks to overwhelming taxes and levies. As globalization continues and the demand for premium vehicles grows, it's high time we question the fairness of such taxation and strive toward a more balanced automotive policy.
