TL;DR
The India-EU FTA could reduce import duties on European luxury cars, potentially lowering prices but raising concerns about local manufacturing impact.
The proposed India-European Union Free Trade Agreement (FTA) is back in discussions, with a significant potential impact on the Indian automobile market, particularly for luxury cars. If finalized, the agreement could lead to a phased reduction in import duties on European vehicles and components, which currently stand as high as 100% on fully built units (CBUs). This could make premium and luxury cars, especially niche and low-volume models, more accessible and affordable for Indian consumers.
While the FTA promises benefits for Indian buyers through potentially lower prices and access to advanced technology, safety systems, and EV platforms, India remains cautious. The government's primary concern is to ensure that reduced duties do not negatively impact local manufacturing or discourage global carmakers from investing in Indian production facilities. Electric vehicles are also a key point of discussion, with the EU advocating for easier access to the Indian EV market.
