A substantial reduction in tariffs on European cars entering India has emerged as one of the key gains of the historic FTA between India and the European Union. From the hefty import duty of 110 per cent to 10 per cent, the drop is being viewed as a big relief for the Indian customerss.
EU cars like BMW, Audi, Ferrari, to get cheaper in India as FTA cuts tariffs to 10 pc from 110 pc. (ANI)
A substantial reduction in tariffs on European cars entering India has emerged as one of the key gains of the historic Free Trade Agreement (FTA) between India and the European Union. From the hefty import duty of 110 per cent to 10 per cent, the drop is being viewed as a big relief for the Indians.
Cars of European brands, including Mercedes-Benz, BMW, Audi, Ferrari, Lamborghini, Rolls-Royce, and Bentley, are set to become cheaper following the signing of the ‘mother of all deals’ at the 16th India-EU Summit on Tuesday.
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As per the deal, India has agreed to a quota-based liberalisation of the automobile sector, which will allow European carmakers to introduce their models in India, particularly in higher price segments, with reduced tariffs.
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The reduced tariff will apply under an annual quota of 2.5 lakh vehicles. Currently, India imposes a 70 per cent duty on imported passenger vehicles priced under $40,000, while a customs duty of 110 per cent is charged on cars priced above $40,000.
The tariff cut will pave the way for a larger-scale business by European carmakers in the Indian market, while Indian consumers will benefit from access to high-technology vehicles.
Reports suggest that India’s car market is likely to grow to over six million units per year by 2030, prompting new investments from several European companies. Giant firms, including Renault and Volkswagen Group have also planned new investments in India, aiming to expand brand prominence beyond Europe.
With the successful signing of the ‘mother of all deals,’ the European Union is targeting a two-fold rise in India’s imports from Europe by 2032. This agreement will help in annual duty savings of up to four billion euros on European goods.
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