India said to cut import duty on cars to 40% from 110% in trade deal with EU

India is set to significantly reduce import duties on cars from the European Union as part of a long-awaited free trade agreement that could be finalized as early as Tuesday, according to sources cited by Reuters. The proposed deal is expected to lower peak import tariffs on EU-made cars to 40% from the current maximum of 110%, marking a substantial opening of India's heavily protected automobile market.

The initial reduction would apply to a limited number of vehicles imported from the 27-member bloc, provided their declared import value exceeds approximately Rs 16.3 lakh ($17,739). Over time, duties on these cars could be further reduced to as low as 10%. This move would represent a major concession as trade negotiations between India and the EU approach their conclusion.

The phased reduction in tariffs would significantly improve access to the Indian market for European automakers such as Volkswagen, Mercedes-Benz, and BMW, which have long pushed for lower import barriers.