India-EU FTA to Drive Down European Car Prices: A New Era for Auto Trade

India's free trade agreement with the European Union aims to reduce import duties on European cars. The FTA will gradually lower tariffs from 110% to 10% for up to 250,000 vehicles yearly. This trade deal is expected to benefit Europe's luxury car manufacturers but not affect locally produced vehicles.

India's new free trade agreement (FTA) with the European Union is set to bring down the import duties on European cars, providing a significant opportunity for the luxury vehicle market. The agreement aims to reduce tariffs from an existing 110% to just 10% for 250,000 vehicles each year.

The historic FTA marks a turning point in trade relations, offering European carmakers like Mercedes-Benz, BMW, Audi, and others a chance to bolster their share in India. However, the agreement will not impact cars priced below Rs 25 lakh, ensuring domestic manufacturers like Maruti-Suzuki and Tata Motors remain competitive.

Despite the promising outlook, companies like Mercedes-Benz and Audi remain cautious about immediate price reductions. They underscore the importance of analyzing the final terms before making decisions, pointing to substantial local manufacturing operations as key to their strategy in India.