India Safeguards Mass Market Cars, Strikes Strategic EU Trade Pact

India has protected its mass market cars in a trade pact with the EU, granting import duty concessions only for higher-priced vehicles. The agreement, to be implemented this year, includes annual quotas and phased duty reductions, aiming to bring EU manufacturers into the Indian auto sector more fully.

India secured protections for its mass market vehicles in a new trade agreement with the European Union, extending import duty concessions only for luxury cars priced above Rs 25 lakh. This strategic move aims to foster a balanced automotive trade between the nations, an official disclosed on Wednesday.

The agreement, announced on Tuesday, will set quotas for diesel, petrol, and electric vehicles while maintaining high duties on lower-priced cars. India's plan is to entice European manufacturers, with hopes for increased local manufacturing and assembly within its borders as the deal progresses.

By phasing duty reductions over several years, India aims to encourage the EU's original equipment manufacturers to invest in local supply chains, boosting domestic industry and technology development. The initiative is expected to strengthen India's position in the global automotive sector by fostering meaningful partnerships.

(With inputs from agencies.)