Archive · 28 Jan 2026
India-EU FTA Cuts Tariffs, Boosts Trade
India and the European Union have signed a big trade deal.
This deal will make European cars like BMW, Audi, and Ferrari much cheaper in India.
Right now, India charges a lot of tax on these cars, but the new deal will lower that tax a lot.
This means people in India might be able to buy these fancy cars for less money.
The deal also makes it easier for European companies to sell other things in India, like medicine and medical equipment.
Some people are happy because it will make these things cheaper.
But others are worried because it might be harder for Indian companies to compete.
The deal is also important because it shows that India and the EU are working closely together, especially when there are problems in the world.
This could help both places grow and do more business together in the future.
The India-EU FTA reduces tariffs on European cars from 110% to 10% under an annual quota of 250,000 vehicles.
This will make luxury European cars like BMW, Audi, and Ferrari cheaper in India.
The deal also eliminates tariffs on nearly all EU pharmaceutical products and over 90% of optical, medical, and surgical equipment.
The FTA aims to boost trade, reduce healthcare costs, and encourage investment by European companies in India.
Some experts caution that the deal might impact the Indian pharma industry and medical device market, emphasizing the need for regulatory safeguards.
- Who
- India and the European Union
- What
- Signed a Free Trade Agreement (FTA) reducing tariffs on European cars and other goods
- When
- January 27, 2026
- Where
- 16th India-EU Summit
- Why
- To boost trade, reduce costs for consumers, and strengthen economic and strategic cooperation
- Tariff Reduction
- From 110% to 10% on European cars under an annual quota of 250,000 vehicles.
- Annual Quota
- 250,000 vehicles for European cars.
- Current Duty on Cars
- 70% on cars under $40,000, 110% on cars above $40,000.
- Expected Market Growth
- India's car market to grow to over 6 million units per year by 2030.
- EU Target
- Two-fold rise in India’s imports from Europe by 2032.
- Annual Duty Savings
- Up to four billion euros on European goods.
- Key European Brands
- Mercedes-Benz, BMW, Audi, Ferrari, Lamborghini, Rolls-Royce, Bentley.
- Pharmaceuticals Tariff
- Duties of up to 11% on EU pharmaceutical products to be removed.
Sources
India-EU FTA Blueprint for Shared Prosperity, Stability: PM Modi
EU cars like BMW, Audi, Ferrari, to get cheaper in India as FTA cuts tariffs to 10 pc from 110 pc
António Costa’s India connection: How a Goan-origin European Council head just delivered mega EU free trade deal
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Letters to Editor
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What India and EU offer each other under FTA: Tariff cuts, preferential market access and more
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New Trade Deal Open EU Markets Worth Rs 6.4 Lakh Crore: Piyush Goyal
DC Edit | Trade Deal, Strategic Ties A ‘Win-win’ For India, EU
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Letters to Editor
Major breakthrough
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