India Slashes Car Import Tariffs in Landmark EU Trade Deal

India will cut import duties on EU-made cars from 110% to 40% immediately under a new trade agreement, with further reductions to 10% phased in over time. The deal primarily benefits premium European automakers like Volkswagen, Mercedes-Benz, and BMW, allowing them to compete more effectively in India’s protected automotive market.

The tariff concessions apply only to vehicles priced above €15,000 ($17,739) and are contingent on ratification of the broader EU-India Free Trade Agreement. Two unnamed sources familiar with the negotiations confirmed the terms to Reuters, though both governments declined to comment.

This breakthrough follows years of stalled talks and comes as India seeks to boost exports of textiles, jewelry, and other goods facing U.S. tariffs. The agreement positions India—the world’s third-largest auto market—as a more accessible destination for foreign automakers while maintaining some domestic industry protections.