New Delhi: India is set to slash import tariffs on cars from the European Union from 110% to 40%, marking the biggest opening of the country’s robust automobile market as the two sides chisel out a free trade deal that could be announced as early as Tuesday.
Prime Minister Narendra Modi administration has agreed to immediately cut the tariff on a select group of cars from the 27-nation bloc with an import price exceeding 15,000 euros ($17,739), according to a Reuters report.
Attributing this to sources familiar with the discussions, the report said overtime this duty is expected to fall further to 10%, ea
sing access to India for European carmakers including Volkswagen, Mercedes-Benz and BMW.
India has offered an immediate cut to 40% on around 200,000 internal combustion engine cars a year from the EU in its boldest move yet to liberalise the sector, one source said. The quota and timelines could still be tweaked before a final announcement, the report said
Battery electric vehicles will be excluded from cuts for the first five years to shield investments by domestic firms such as Tata Motors and Mahindra & Mahindra in the nascent market, after which EVs would get similar reductions, the report said.
The move — coming amid growing global concerns over economic and security disruptions triggered by policies of the Trump administration — would mark a major opening of the tightly protected Indian automobile market.
India ranks as the world’s third-largest car market by sales after the United States and China, but its local auto sector has long been ringed with duties of 70% and 110% on imported vehicles.