TL;DR
The EU-India Free Trade Agreement is projected to cut tariffs on European luxury cars, leading to 20-30% price reductions for consumers in India and increasing competition.
The recently concluded negotiations for a free trade agreement (FTA) between the European Union (EU) and India are poised to dramatically reshape the Indian luxury car market. This landmark deal is anticipated to lead to a significant reduction in the prices of European luxury vehicles in India, making brands like Mercedes-Benz, BMW, and Audi more accessible to Indian consumers.
Under the terms of the agreement, tariffs on EU-manufactured cars will drop to 10% within an annual quota of 250,000 units, a stark contrast to the previously prohibitive import tariffs that could reach up to 110%. Additionally, import duties on auto parts are slated for full removal within 5-10 years, which will further aid local assembly operations and reduce maintenance costs for European cars in India.
Industry experts predict that Indian consumers can expect price reductions of 20-30% on European luxury vehicles. This dismantling of protectionist barriers is also expected to compel domestic manufacturers, such as Tata and Mahindra, and Japanese players like Maruti Suzuki, to enhance their technology and quality to maintain competitiveness in the evolving market.
