India-EU Free Trade Agreement could cut tariffs on fully-imported European cars, making luxury and high-performance models like BMW, Audi, and Mercedes more accessible for Indian buyers over the next few years.
✨ AI Overview
India-EU Car Deal: Lower Tariffs, But Not So Fast
Summary generated by AI · Reviewed by Gear Choice Team
India and the European Union have signed a major trade agreement.
Tariffs on fully-imported cars could drop significantly from 110% to 10%.
The reduction will take 1-2 years to implement and only applies to Completely Built Units (CBUs), not locally assembled vehicles.
Okay, straight up India and the European Union have signed this big agreement. Fully-imported cars? Tariff could drop from 110% to 10%. Sounds amazing, right? Car enthusiasts were buzzing instantly. But hold on don’t rush to open your chequebook. There’s more to this story.
When Will It Come Into Effect?
Short answer not tomorrow. Not even next month. Long answer it’s messy. It might take 1–2 years. First, tariffs drop to 40%, then slowly to 10%. And, yep, legal approvals and parliament ratification are required. So expect a wait. I take into account while a similar deal was announced returned in 2018 human beings notion expenses will drop right now. Haha, nope Reality check hit after months.
Which Cars Will Get Cheaper?
Only completely imported cars absolutely made outdoor India (CBU). If it’s assembled regionally, forget it. Most Mercedes, Audi, BMW sedans and SUVs? Already made here. No rate drop there. Story time as soon as I visited an Audi dealer, he laughed and stated Sir CBU fee cut? Only AMG or RS collection, rest neighborhood sorry True story.
Bespoke and excessive-performance fashions like Mercedes-AMG, Audi RS, BMW M yeah, they'll advantage. BMW M3, Mercedes-AMG G sixty 3, Audi RS5, Porsche 911 the works. Ultra-costly producers like Ferrari, Maserati, Porsche? Definitely more aggressive pricing. And Skoda or Volkswagen? Limited complete imports like Golf GTI or Octavia RS these turns into slightly less complicated on the pocket. Exciting times for lovers.
How Much Savings Are We Talking About?
Assume price lists drop from a hundred and ten% to forty% costs ought to fall roughly 33%. Rs 1 crore automobile? Maybe Rs 66 lakh. If tariff hits 10%, Rs 51 lakh. But wait, it’s no longer guaranteed. Manufacturers can pad margins, currency can range, counter cess may also apply. Remember, luxury sedan at access-stage charge? Forget it. That’s fantasy land.
What’s in It for Customers?
Short story better motors, better tech, slightly higher expenses. Ultra-luxurious and high-overall performance motors advantage maximum. But mass-market Euro brands like VW, Skoda, Renault? Yeah, some advantage. Cars that were too expensive before now maybe viable.
Photo : EU FTA may cut prices of luxury cars in India.
Unique case some models have to be full imports because CKD assembly isn’t possible locally. Skoda Superb, for example. Lower tariff? Aggressive pricing. Also, parts and components tariffs will drop in 5–10 years. This means cheaper spares and better quality components for Indian-made cars. Smart move for manufacturers.
Don’t expect a Mercedes at Rs 25 lakh. Or Land Rover at Rs 50 lakh tomorrow. Simple. But watch manufacturers get creative. VW might bring back diesels. BMW may experiment with body styles or powertrains. Golf GTI or Octavia RS? Suddenly more accessible. Quota 2.5 lakh vehicles annually, gradual tariff cuts. Domestic brands get time to adapt. For now, sit tight. Wait and watch how this unfolds. Exciting, isn’t it?