TL;DR
India is expected to cut car import tariffs from the EU to 40% as part of a free trade agreement, easing market access for European automakers.
India is reportedly planning to significantly reduce tariffs on cars imported from the European Union, slashing duties from as high as 110% to 40%. This move, part of a nearing free trade agreement (FTA) with the EU, could be announced as early as January 27, 2026.
Prime Minister Narendra Modi's government has agreed to immediately cut the tax on a limited number of EU-made cars with an import price exceeding 15,000 euros, with further reductions to 10% over time. This will ease market access for European automakers such as Volkswagen, Mercedes-Benz, and BMW, who have faced challenges growing in India due to high tariffs.
