India Slashes Tariffs on Luxury European Cars: A New Era for Automobile Trade

India will lower tariffs on luxury European cars to 30% under a new trade deal with the EU, opening market access for brands like BMW and Mercedes-Benz. The deal cuts tariffs on most goods to offset global trade tensions. It includes a phased reduction of duties on specific car categories.

In a major shift in trade policy, India has agreed to significantly reduce tariffs on luxury European cars, dropping duties to 30% under a recently finalized trade deal with the European Union. This decision opens up the previously protected market to high-end brands such as BMW and Mercedes-Benz.

The agreement, announced on Tuesday, aims to boost trade between the two regions, countering global trade tensions and unreliable U.S. trade policies. India, the world's third-largest car market, has historically maintained high import duties of up to 110% to protect its domestic auto industry.

The reduction extends to different price categories, with a gradual lowering of duties on cars priced above 15,000 euros. The move is expected to benefit other automakers like Volkswagen and Renault, encouraging technology transfer and expanded supply chains, while maintaining some protection for local electric vehicle manufacturers.

(With inputs from agencies.)