India May Cut EU Car Import Tariffs to 40%
India is considering a significant reduction in import tariffs on cars from the European Union as part of the ongoing India-EU free trade agreement negotiations. According to officials familiar with the discussions, New Delhi may cut peak import duties on certain EU-made cars from the current level of up to 110% to around 40%.
Limited Opening of Auto Market
The proposed tariff reduction is expected to apply to a limited volume of fully built cars, likely those priced above a specified threshold. This would mark one of the most substantial openings of India’s highly protected automobile sector, potentially benefiting European manufacturers while maintaining safeguards for domestic producers.
The move is seen as a key concession aimed at unlocking progress in the long-pending trade pact between India and the EU. Indian negotiators are reportedly seeking reciprocal market access in areas such as services, government procurement, and labour mobility.
Domestic Industry Concerns
While the proposal could make premium European cars more affordable in India, concerns remain within the domestic automobile industry about increased competition. Officials have indicated that electric vehicles and mass-market segments may continue to face higher duties for now to protect local manufacturing and investment.
Negotiations are ongoing, and final tariff structures will depend on broader agreement terms.
