Archive · 26 Jan 2026
India to Cut EU Car Tariffs
India and the European Union are making a big deal to lower the taxes on cars that come from Europe to India.
Right now, these taxes are very high, up to 110%, but they will go down to 40% and then maybe even 10% later.
This will make it easier and cheaper for European car companies like Volkswagen, Mercedes-Benz, and BMW to sell their cars in India.
However, electric cars won't get this benefit for the first five years so that Indian companies like Mahindra and Tata can keep growing.
India's car market is huge and is expected to get even bigger, so this change could bring more European cars to India.
India plans to reduce import tariffs on EU cars from 70-110% to 40%, with a potential further reduction to 10%.
The tariff reduction applies to combustion-engine cars priced above 15,000 euros, with an annual quota of 200,000 cars.
Battery electric vehicles will be excluded from duty cuts for the first five years to protect domestic investments.
The agreement is expected to be announced as early as Tuesday, expanding bilateral trade between India and the EU.
European automakers currently hold less than 4% of India's car market, which is dominated by Suzuki, Mahindra, and Tata.
- Who
- India and the European Union
- What
- Reduction of import tariffs on cars from the EU
- When
- As early as Tuesday (announcement), with further reductions over time
- Where
- India
- Why
- To open the auto market and expand bilateral trade
- Current Tariffs
- 70-110%
- Proposed Tariffs
- 40% (initially), then 10%
- Cars Affected
- Combustion-engine cars priced above 15,000 euros
- Annual Quota
- 200,000 cars
- EV Tariff Reduction
- Excluded for first 5 years
- Expected Announcement Date
- Tuesday
- India's Car Market Size
- 4.4 million units/year
- Projected Market Size by 2030
- 6 million units/year
