BMW Group India President and CEO Hardeep Singh Brar said on Monday that reducing custom duty on imported cars under the India-European Union free Trade Agreement FTA can boost the growth of the Luxury car Market in India. At present, this segment is still very small, with luxury cars making up only about 1 percent of the country’s total passenger vehicle market. He explained that lower import taxes would make premium cars more affordable for the buyers and encourage global automakers to expand their presence in India. This, in turn, could help the luxury car segment grow faster in the coming years.
What Hardeep Singh Brar Said?
Brar also described the India-EU free trade agreement as a historic step for both the sides. According to him, the deal will not only increase trade between India and European countries but also promote the exchange of advanced technology and innovation. He added that such cooperation will create long term, benefits for industries, businesses and consumers in both the regions.
Hardeep Singh Brar said that from the automotive industry’s point of view, there is hope that the free trade agreement will include balanced and mutually beneficial provisions. he also explained that such measures can help boost the demand in the luxury car segment while also strengthening the supply chain integration. Brar added that this is especially important in the current global geopolitical environment.
He further stated that if customs duty on completely built units CBUs is reduced, it could significantly support the expansion of the luxury car market in India. Lower the import taxes would make premium vehicles more accessible and encourage global manufacturers to invest more actively in the Indian market.
He further explained at present, completely built units CBUs account for around 5 percent of the company’s total sales in India. However, such a policy framework would allow automakers to expand their product portfolio, introduce globally popular models and test new products in the Indian market. According to Brar, this approach would be a true win-win situation, for both India and the European union, as it would encourage innovation, variety and long term growth.
At present, imported passenger vehicles prices below 40,000 dollars attract a basic customs duty of 70 percent. On the other hand, vehicles priced above 40,000 dollars face an effective import duty of nearly 110 percent. These high taxes significantly increase the final cost of luxury cars in India, limiting their reach among buyers. Industry leaders believe that reducing these duties under the proposed trade agreement could make premium cars more affordable and support steady growth in the luxury vehicle segment.
