US EditionIndia plans to slash car tariffs to 40% in trade deal with EU: Reuters
India will cut import tariffs on about 200,000 combustion-engine EU cars annually to 40%, easing access for European automakers while excluding electric vehicles for five years.
- On Tuesday, India plans to cut import tariffs on EU cars to 40% from as high as 110%, with immediate reductions for a limited set of models, sources said.
- Geopolitical and trade pressures have pushed negotiators toward compromise as the European Union seeks supply‑chain diversification and India aims for technology, investment, and access to its $4.2 trillion economy.
- Negotiators say the tariff path will be phased, reaching about 10% over time, while battery electric vehicles will be excluded from duty cuts for five years to protect Mahindra & Mahindra and Tata Motors.
- Lower taxes will let carmakers price imported models more competitively and test demand, while investors and suppliers line up new investment as the Indian market expected to grow to 6 million units a year by 2030.
- If signed, the pact will still need European Parliament approval, which could take at least a year, while the Carbon Border Adjustment Mechanism and agriculture and dairy remain unresolved.
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According to sources, the measure is part of a free trade agreement being negotiated between the country, governed by Narendra Modi, and the European bloc; tariffs could reach 10% over time.
The Free Trade Pact has been named "mother of all agreements".
Even before the trade summit with the EU, a partner country seems to be planning a deal. According to this, the country wants to reduce tariffs on EU cars to 40 percent.
'Successful India makes world stable, prosperous and secure': EU chief ahead of landmark free trade deal
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