The Indian government is preparing for a major reduction in the import tariff on cars coming from Europe. According to Reuters report, this tariff can be reduced from 110% to 40%. This decision is part of the free trade agreement between India and the European Union. This agreement can be announced tomorrow i.e. Tuesday in the India-EU summit. According to sources, the Modi government has agreed to immediately reduce the tax on some cars priced above 15 thousand euros (about Rs 16.3 lakh). Volkswagen, Mercedes-Benz may become cheaper. Under FTA, India will reduce the duty on about 2 lakh diesel-petrol engine cars annually by 40%. Currently, there is 70% to 110% import duty on foreign cars in India. Over time this may fall to 10%, making European companies like Volkswagen, Mercedes-Benz and BMW cheaper in the Indian market. However, EU manufacturers’ share in India’s 44 lakh units annual car sales market is less than 4%. At the same time, electric vehicles will be kept out of duty cut for the first 5 years, so that domestic players like Tata Motors and Mahindra & Mahindra get protection. After that the cut may be applicable on them also. European Commission Chief has called the agreement the mother of all deals. Earlier on January 20, European Commission Chief Ursula von der Leyen said that a historic trade agreement is going to be signed between India and the European Union (EU). This free trade agreement will create a new market for 200 crore people, which will represent about 25 percent of global GDP. Ursula called it the Mother of All Deals at the World Economic Forum (WEF) held in Davos. She will be on a visit to India from 25 to 27 January and the completion of this agreement can be announced in the India-EU summit to be held on 27 January. Ursula said- I am going to India. There is still some work left, but we are on the threshold of a historic agreement. This deal will give Europe the first-mover advantage (first big opportunity) to do business with India, the world’s fastest growing and most dynamic country. What will be the benefit of the agreement This Free Trade Agreement (FTA) will greatly increase trade between the two parties. Trade with the EU stood at $137.41 billion in 2023-24, which is expected to double after this agreement. The agreement will reduce tariffs on goods and services, making trade easier. The two sides will also announce a defense agreement and a strategic plan for 2026-2030. India-EU agreement announced amid Trump tariffs This agreement is coming at a time when Trump’s new tariff policies and trade sanctions have created problems in the global supply chain. India and all 27 countries of the European Union have been affected by America’s ‘tariff war’. In such a situation, both sides have decided to strengthen mutual trade. India is exploring new markets to sell Indian products by entering into agreements with European countries. The long wait of 19 years will end. The first attempt for a Free Trade Agreement (FTA) between India and the European Union started in the year 2007. However, these talks were halted in 2013 due to differences in ambitions and rules. After a gap of about 9 years, talks were started again in June 2022. Now this deal is going to be finalized in the beginning of 2026. India has signed a free trade agreement with the UK. Earlier on July 24, a free trade agreement was signed between India and the United Kingdom. This will make UK cars, whiskey, clothes and footwear cheaper in India. The free trade agreement was signed after 14 rounds of negotiations over about 3 years. Now 99% of India’s goods will be exported to UK at zero tariff. Whereas 99% of UK goods will be imported at 3% average tariff. With this, bilateral trade is likely to double to $120 billion by 2030. Also read this news: American Ambassador said – No country is important than India: There will be talk on trade deal tomorrow; Trump may come to India next year. America’s new Ambassador to India, Sergio Gore, took charge in New Delhi on Monday. He said that there is no country more important for America than India. Regarding the trade deal, he said that tomorrow i.e. on Tuesday there is going to be a phone conversation between the officials of the two countries. Read the full news: UK’s whiskey and cars will be cheaper in India: Free trade agreement signed between the two countries, know what else will affect the prices of UK cars, whiskey, clothes and footwear will be cheaper in India. After 14 rounds of talks in about 3 years, India-UK signed the Free Trade Agreement on 24 July. Now 99% of India’s goods will be exported to UK at zero tariff. Read full news
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Mercedes-BMW may become cheaper in India: Tariff on cars coming from Europe will be reduced by 40%; Announcement possible in free trade agreement tomorrow
