As part of a long-pending India-EU trade agreement, the Indian government is open to reducing car import tariffs to 10% — a sharp drop from the current 100%+ rates. Sources close to the matter say this move could help seal the deal by the end of 2025, even as domestic automakers push back.
💶 A Sweet Deal for Europe?
- The European Union wants zero or minimal tariffs on car imports into India.
- Carmakers like Volkswagen, Mercedes-Benz, and BMW stand to gain significant access to the world’s third-largest car market.
- Tesla may also benefit as it prepares to sell imported EVs from Berlin in India this year.
🇮🇳 Domestic Players Raise Red Flags
- Tata Motors and Mahindra & Mahindra argue the cuts will cripple domestic investments.
- India’s auto industry has suggested:
- A phased tariff cut on petrol cars to 30%.
- No tariff reductions on EVs until 2029, followed by limited cuts.
🏭 Protection vs Progress
India’s 4-million-unit auto market is among the most protected globally. Industry insiders warn that sudden tariff drops could lead to a flood of cheaper imports, damaging ‘Make in India’ efforts and threatening local jobs.
🔄 Negotiation Status
- Both India and EU are under pressure to wrap up talks by year-end.
- Discussions also involve phased access, flexibility, and global economic uncertainty.
🧩 What’s Next?
The move may signal India’s shift towards more open trade policies — but only if it can balance foreign investment opportunities with domestic manufacturing strength. As negotiations continue, all eyes are on how India leverages its growing market to secure strategic wins.
Stay tuned for more updates as this high-stakes deal unfolds.
