Automobiles – Event Update – Reduction in import tariff for EU-made cars
Published on 27 Jan 2026
India is likely to reduce tariff on EU-made fully built cars (CBUs) from 70%-110% to 40% under the soon-to-be-signed India-EU FTA; the tariff is expected to be decreased to ~10% over the next decade. This will provide EU carmakers greater access to Indian PV market (3rd largest globally by volume, just behind the US & China). Luxury vehicles form ~1% of Indian market. Therefore, the tariff reduction should not impact the mass market players like Maruti Suzuki and entry/mid-level vehicles from TMPV and M&M, but it will impact to a small extent premium plus cars from these players. Tariff reduction on BEVs from 100% is expected to be applicable after 5 years in a phased manner, giving the likes of TMPV and M&M some relief. This India-EU FTA, which has been under negotiation for long, is expected to be finalized this week, as per media reports.
