India and the European Union on Tuesday announced a historic free Trade Agreement FTA. This deal includes the several major decisions from both the sides and is expected to strongly boost trade between Indian and Europe. Under the FTA signed between India and the 27-nation European Union, the Customers duty on Luxury cars imported from Europe will drop sharply from 110 percent to just 10 percent. This means that once the agreement comes into effect, the prices of European Luxury cars in India will fall significantly. As a result, Premium vehicles from brands like Mercedes, range rover and Rolls-Royce are expected to become much more affordable for Indian buyers.
India Changes a 70 percent customer duty on passenger cars imported from Europe
At presnet, India changes a 70 percent customer duty on passenger Cars imported from europe that costs less than $40,000. For cars priced above $40,000. A heavy duty of 110 percent is imposed. However, after the India-EU free trade agreement comes into effect, the customs duty on European cars will be reduced to just 10 percent instead of 110 percent. This major cut in tax is expected to bring a big drop in the prices of imported luxury cars in India. As a result, these premium vehicles will become more affordable, leading to a strong rise in their sales across the Indian market.
For example, a European car with a CIF value of around Rs.1 crore is currently sold in India at an ex-showroom price of nearly Rs.3 crore due to high import duties. After the FTA is implemented, prices of such vehicles are expected to fall sharply under the new tariff rules. In the coming years, as duties are reduced further, car prices may drop even more. However, this benefit will apply only to petrol and diesel vehicles. Electric cars have been kept out of the agreement for the first five years to protect domestic manufacturers like Tata Motors and support India’s local EV industry.
For Instance, a European car with a CIF value of around Rs.1 crore is currently sold in India at an ex-showroom price of nearly Rs.3 crore due to high import duties. Once the FTA is implemented, prices of such cars are expected to drop significantly unuder the new tariff structures. In the coming years, as duties are reduced further, vehicle prices may fall even more. however, this benefit will be limited to petrol and diesel cars only. Electric vehicles have been excluded fromo the agreement for the first five years to ensure protection for domestic manufacturers like Tata Motors and to support Ind
