India Slashes Duties on Luxury European Cars: A Trade Milestone with the EU

India and the European Union have finalized a trade deal reducing import duties on luxury European cars to 30%, opening the Indian market to brands like BMW and Mercedes-Benz. This agreement is part of a strategy to boost trade amid global uncertainties, impacting both combustion and electric vehicles.

In a landmark trade agreement, India will reduce import duties on luxury European cars from a maximum of 110% to just 30%. This strategic move, confirmed by an official source, aims to open India's automobile market to high-end manufacturers like BMW and Mercedes-Benz.

The pact, finalized on Tuesday with the European Union, seeks to reduce tariffs on most goods, boosting trade levels significantly. As the world's third-largest car market, India's prior import tariffs of 70% to 110% presented a significant barrier to foreign carmakers. The new deal will substantially lower duties on imported vehicles, split into three pricing categories.

The deal also anticipates a significant influx of European cars with annual import caps applied to different categories. While the concessions also extend to electric vehicles, the tariffs on these will reduce gradually, ensuring protection for local manufacturers like Tata and Mahindra over the next five years.

(With inputs from agencies.)