India-EU FTA: Car tariffs cut to 40%, pact could sign this year
India-EU FTA: Car tariffs cut to 40%, pact could sign this year
Negotiations on the India-EU FTA wrap up with legal scrubbing underway; deal could sign later this year and enter force early next year, including a significant car-tariff cut.
Negotiations on the India–EU free trade agreement have been concluded after years of talks, with both sides aiming to sign later this year and have the pact enter into force early next year. Legal scrubbing of the FTA text is currently underway, and officials are working to clear procedural hurdles to accelerate the signing.
One of the deal’s most talked-about elements is India’s offer to significantly cut import duties on European cars. Today, fully built cars from the EU attract tariffs ranging from 70% to 110%. Under the proposed framework, peak duties on a limited number of EU-made cars priced above €15,000 could be cut to 40% upfront, with further reductions mapped out over time.
Officials say the negotiations have gained momentum thanks to strong political will on both sides, reflecting a broader interest in retooling supply chains and reducing dependence on third countries amid shifting global trade dynamics. The pact is expected to deepen economic integration and boost trade and investment flows between India and the EU.
Industry observers say the deal could be a catalyst for growth, with some projections suggesting exports could rise by as much as $50 billion. While welcome news for EU automakers, the terms will need to balance Indian manufacturing interests and domestic auto industries.
With signing anticipated this year and a possible entry into force early next year, traders and manufacturers will be watching ongoing scrubbing and final negotiations closely as they await a concrete timeline and the detailed tariff phase-in plan.
