Luxury cars by EU brands might become cheaper in India
What's the story
The Indian government is likely to offer some concessions on import duties for high-end cars to the European Union (EU). The move is part of a free trade agreement (FTA) being negotiated between the two parties, government officials told Moneycontrol. At present, India's import duty on completely built-up (CBU) passenger vehicles is 110% for the cars costing over $40,000, and 70% for those up to $40,000.
Duty reduction
India working on duty reduction framework for EU
The EU has raised concerns over the high import duty on its cars. The issue was also raised by Germany, home to global brands like BMW, Mercedes-Benz, and Audi. In response, India is working on a nuanced duty reduction framework for the EU's automotive sector. This framework will be similar to what was offered to the United Kingdom (UK). However, the final outcome will depend on further negotiations between both sides.
Negotiation progress
India-EU FTA talks ongoing
The 13th round of trade talks between India and the EU began today and will continue throughout the week. The next round of negotiations will take place in Brussels next month. Both parties are hopeful to finalize the FTA by December this year.
Tariff reduction
What does India-UK trade deal say about luxury cars?
Under its FTA with the UK, signed on May 6, India will gradually reduce import duties on automobiles. The reduction will be based on engine capacity and vehicle price. For example, for internal combustion engine (ICE) powered CBUs with a duty of 110%, the India-UK trade agreement has lowered import tariffs to 30% from the first year. These levies will further decrease to 10% from the fifth year.