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Premium luxury European cars, specified arsenic BMW, Mercedes, Lamborghini, Porsche, and Audi, are acceptable to go cheaper successful the Indian marketplace erstwhile the bilateral escaped commercialized statement comes into force, apt adjacent year, arsenic India volition connection quota-based import work concessions nether the pact, an authoritative said.
The EU volition destruct work successful a phased mode for Indian automobiles, whereas India volition trim the levies to 10% for specified numbers.
Italian carmaker Lamborghini, which sells vehicles successful India with prices starting astir ₹3.8 crore, imports each its models. The EU FTA is apt to beryllium beneficial for the company.
India and the European Union (EU) connected Tuesday (January 27, 2026) announced the decision of negotiations for the escaped commercialized statement (FTA). It is expected to beryllium signed aboriginal this twelvemonth and whitethorn travel into unit from aboriginal adjacent year.
European manufacturers and Indian consumers were keenly watching the advancement of this commercialized pact, talks for which were started successful 2007. Extending work concessions successful the assemblage was 1 of the large contentious issues that led to a intermission successful negotiations successful 2013.
As the country's car assemblage is strengthening, India is extending work concessions nether FTAs. It has provided quota-based concessions to U.K. car makers also.
As per the agreement, India and the EU person negotiated connected a “quota” based work concessions, the commerce ministry authoritative said, adding that the EU has a “very” assertive request for this sector.
India besides protects its car manufacture strongly, arsenic the assemblage is increasing astatine a faster gait and is simply a large employment creator. It is 1 of the halfway areas successful the ‘Make successful India’ inaugural of the government.
"The EU has got a precise good laid retired car industry, 1 of the astir precocious car industries, and their cars are 1 of the best, and it is simply a reality," the authoritative said.
"Taking enactment of sensitivity connected some sides, we person agreed to a quota-based ecosystem, wherein we are trying to instrumentality attraction of each other’s sensitivities," the authoritative added.
Explaining further, the authoritative said India's car assemblage is mostly dominated by tiny cars (retail terms Rs 10 lakh - Rs 25 lakh) and the EU's involvement successful that country is "not great".
"So, that has been taken cognisance of, and we person decided that cars that are apt to merchantability beneath Rs 25 lakhs successful this country, the EU volition not beryllium exporting those cars to India. They whitethorn manufacture it here, but they volition not beryllium exporting those cars," the authoritative said.
For India, it is the astir important marketplace (cars beneath Rs 25 lakh). The Indian manufacture is precise beardown there, and this is simply a precise fast-growing marketplace successful the country, the authoritative added.
The Rs 25 lakh vehicles see petrol, diesel, and hybrid models. Above Rs 25 lakh, India's marketplace is limited, but its involvement is precocious arsenic they are bully shaper successful this segment.
"Having taken attraction of that, we person fixed them quota-based marketplace access. The marketplace has been segmented into 3 parts beyond that. And the quota volition summation successful a phased manner," the authoritative said.
Under the quota system, work concessions volition beryllium provided for a specified fig of vehicles.
At present, India's import work successful the automobile conception ranges from 66% to 125%.
India volition not springiness immoderate out-of-quota work reduction, arsenic it wants the EU firms to look astatine the anticipation of manufacturing successful India.
"The thought is that beyond quota, if your marketplace grows, you travel and physique it here, arsenic India is simply a increasing market," the authoritative pointed out.
"We would similar European car manufacturers to trial this market, travel here, and if they find this marketplace good, they acceptable shops here, which volition beryllium win-win again, due to the fact that they volition not bash 100% connected capital. They volition person their proviso chains from the EU. So, you volition person immoderate spot of value-add, we volition person immoderate spot of value-add," the authoritative said.
The quota-based strategy volition assistance make jobs successful some economies.
“That's however we person designed it, and we anticipation this volition make immoderate contention and bring successful a batch of manufacturing exertion successful the mean and agelong run. So, that volition beryllium thing bully for consumers and successful the agelong run, bully for our manufacturing ecosystem also," the authorities authoritative said.
"For each car quota that we person fixed them, we instrumentality 2.5 tile quotas from them. So, if I springiness them 1 lakh cars, I volition instrumentality 2.5 lakh cars," the authoritative added.
"They are doubly our market. We are capable to merchantability successful that market, and they volition springiness america implicit duty-free access. We are giving quota work reduction, phased work simplification successful 5 years." Explaining further, the authoritative said the existent threshold is 15,000 euros (about Rs 15 lakh). That means a car worthy ₹15 lakh volition travel to the Indian ports from the EU nether the FTA. After that, determination volition beryllium duty, tax, registration, and it volition adhd different ₹10 lakh. It tin spell up to ₹12 lakh oregon much with 28 oregon 40% GST, insurance, freight transportation, and logistics.
For electrical vehicles (EVs), India's quotas volition commencement from the 5th twelvemonth of the agreement.
"It volition not commencement from time 1 due to the fact that our EV marketplace is growing, and the EV accumulation is growing. So, we person really protected them for the archetypal 5 years," the authoritative said.
Duty simplification successful the EVs volition alteration successful each segment.
"In immoderate segments, it volition beryllium 35% and successful some, it volition beryllium 30% successful the archetypal year. And past it volition spell down slowly,” the authoritative said.
At present, imported rider vehicles priced beneath $40,000 pull a basal customs work of 70%, and those priced supra $40,000 are taxed astatine an effectual customs work of 110 per cent.
The authorities has taken respective measures to enactment the home automobile industry.
The Automotive Mission Plan 2047 (AMP 2047) is an industry-led initiative, actively supported by the Indian government, aimed astatine making the Indian manufacture globally competitive.
