Now cars imported from Europe will become cheaper in India. The Indian government has reduced the import duty on cars coming from Europe from 110% to 10%. However, the government has set an annual limit of 2.5 lakh vehicles for this. This decision is part of the free trade agreement between India and the European Union. This agreement has been announced today at the India-EU summit on Tuesday. After nearly 20 years of long negotiations, both the parties have finalized this agreement. In India, most of the popular cars of Mercedes-Benz and BMW are already manufactured through local assembly. That means the parts are imported and assembled here. Import duty on these is only 15-16.5%, hence there will be no major change in their price due to FTA with EU. Volkswagen, Mercedes-Benz will be cheaper. According to the press statement issued by India and the European Union, the tariff on cars will be gradually reduced from 110% to 10%. Due to which European companies like Volkswagen, Mercedes-Benz and BMW high-end or special models will become cheaper in the Indian market. But this exemption will not be unlimited. The government has implemented a quota system, under which this lower tax will be applicable only on 2.50 lakh vehicles in a year. 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. How much tax is there now? India is the third largest car market in the world. In terms of sales, India is currently the third largest car market in the world after America and China. However, EU manufacturers’ share in India’s 44 lakh units annual car sales market is less than 4%. Despite this, India had kept its auto sector quite protected. Due to high taxes, it was difficult for foreign companies to sell their expensive cars in the Indian market. Now after this deal, it will become easier for companies like Mercedes, BMW, Audi and Volkswagen to expand their reach in India. Mutual trade has crossed 190 billion dollars. In the year 2024-25, the total trade has crossed 190 billion dollars (about Rs 15.80 lakh crore). During this period, India exported goods worth $75.9 billion and services worth $30 billion to European countries. At the same time, Europe sent goods worth $60.7 billion and services worth $23 billion to India. 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. 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 cars to be cheaper in India: Duty on European cars to be reduced from 110% to 10%; Announcement in Free Trade Agreement
