India is preparing to sharply reduce import duties on passenger cars from the European Union as part of a long-anticipated free trade agreement between New Delhi and de facto capital Brussels. Under terms agreed by Indian negotiators, tariffs on certain EU-built vehicles priced above €15,000 will fall from as high as 110% to 40% immediately, with a future reduction to around 10% envisaged over time.
Read More | Delhi May Pay You ₹50,000 to Turn Your Old Car Into an EV
The proposal marks the most significant opening of India’s auto market to overseas manufacturers in decades and comes as both sides near conclusion of what negotiators have dubbed the “mother of all deals.” Officials are aiming to announce the pact on the sidelines of diplomatic engagements this week, though details remain subject to final clearance.
New Delhi’s decision to slash levies on combustion-engine vehicles reflects a move to balance domestic interests with broader strategic goals. Electric vehicles are excluded from the initial tariff cuts for the first five years- a way to safeguard the Indian automakers that have invested heavily in EV production, including Tata Motors and Mahindra & Mahindra.
Read More | World’s Fastest Train: China’s Maglev Hits 700 km/h in Record Test
India’s auto market is the third largest in the world by annual sales, but high import duties have historically limited the presence of European brands. Currently, tariffs on imported cars range between 70% and 110%, a level that industry leaders have often criticised. The new structure is expected to make EU markets such as Volkswagen, Mercedes-Benz and BMW more competitive and affordable for Indian buyers.
