India to cut EU car import tariff to 40% under planned free-trade pact

Key facts

• India will immediately lower customs duty on EU cars priced above €15,000 from up to 110% to 40%.
• The tariff is set to drop further to 10% over time for these vehicles.
• The reduction will apply to an annual quota of about 200,000 combustion-engine cars.
• Battery electric vehicles are excluded from duty cuts for the first five years to safeguard domestic firms Mahindra & Mahindra and Tata Motors.
• European carmakers Volkswagen, Mercedes-Benz, BMW, Renault and Stellantis are expected to benefit from the lower tariffs.
• EU carmakers currently hold less than 4% share in India’s 4.4 million units a year car market.
• The India-EU free trade agreement could be announced as early as Tuesday and has been dubbed the "mother of all deals".