India Plans Major Tariff Cut on EU Cars Ahead of Trade Deal
India is set to slash import duties on European Union cars from 110% to 40%, according to a Financial Times report. This significant reduction is a key part of the long-awaited India-EU Free Trade Agreement (FTA), which is nearing finalization.
Key Details of the Proposed Tariff Cut
- Current Tariff: 110% on imported EU cars.
- Proposed Tariff: 40%.
- Source: Financial Times report.
- Timeline: Expected before the FTA is signed in the coming months.
The move is seen as a major victory for European automakers like Volkswagen, BMW, and Mercedes-Benz, who have consistently cited India’s high import duties as a barrier to market entry.
Background of the India-EU Trade Negotiations
The European Union is India’s largest trading partner. Negotiations for a comprehensive FTA have been ongoing since 2007, covering goods, services, and investments.
While the EU has pushed for lower tariffs on its automobiles, wines, and spirits, India has sought better market access for its textiles, pharmaceuticals, and other key exports. The reported tariff cut on cars represents a crucial compromise to break the long-standing deadlock.
The report states that both sides are close to finalizing the broader agreement, with an official announcement expected soon.
