India's Bold Move: Slashing EU Car Tariffs by 60%

India plans to cut tariffs on cars from the EU from 110% to 40% as part of a new trade pact, potentially ratified soon. This move aims to provide European automakers better access to India's auto market and is expected to significantly enhance bilateral trade relationships.

In an ambitious move, India is set to reduce tariffs on cars imported from the European Union, dropping rates from up to 110% to 40%, according to insiders. The step comes as the two sides close in on a free trade deal expected to finalize soon, marking a significant opening of India's automotive market.

Prime Minister Modi's administration is poised to implement an immediate tax reduction for a select number of cars costing over 15,000 euros, progressing to a 10% tariff over time. While confidentiality surrounds the talks, industry experts anticipate better access for European car firms like Volkswagen and BMW into a fiercely protected market.

Dubbed 'the mother of all deals', the pact is anticipated to bolster bilateral trade and extend India's exports beyond textiles and jewellery. Despite a current low market share, European automakers could see renewed growth as import tariffs decrease, offering opportunities to expand their reach in India's burgeoning auto industry.