Exclusive: India to slash tariffs on cars to 40% in trade deal with EU, sources say.
š„ Exclusive: India to slash tariffs on cars to 40% in trade deal with EU
India is poised to cut import tariffs on European cars from current highs of 70ā110% down to 40% as part of a major free trade agreement with the European Union, according to sources familiar with the talks. Under the deal, initial cuts would apply immediately to certain imported vehicles (priced above ā¬15,000), with plans to reduce tariffs further toward 10% over time.
š®š³š¤šŖšŗ European automakers ā including Volkswagen, Mercedes-Benz, and BMW ā stand to benefit from easier access to Indiaās vast auto market. EVs will be excluded from tariff cuts for the first five years to protect Indiaās domestic builders. (Reuters)
š Broader trade deal context:
ā¢ The India-EU free trade agreement (FTA) is expected to be announced soon during the India-EU summit in New Delhi, potentially concluding long-running negotiations and boosting trade ties. (Reuters)
ā¢ Spainās foreign minister said the deal, once finalized, would form one of the worldās largest free trade zones, covering 2 billion people and 25% of global GDP. (Reuters)
Why this matters:
ā¢ High tariffs have historically limited European car imports into Indiaās market, which is the third-largest globally. Reducing them could lower prices for consumers and encourage European investment. (The Financial Express)
ā¢ The move is seen as a sign of deeper economic integration between India and the EU amid a backdrop of global trade tensions and shifting supply chains. (The Business Standard)
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