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India has offered European automobile makers a significantly deeper opening of its protected passenger-vehicle market under the proposed India-EU Free Trade Agreement (FTA) with sharp duty cuts. On its part, Brussels offers Indian car manufacturers a much larger duty-free export opportunity with more liberal quotas.
Details emerging after legal scrubbing of the FTA, made public by the EU, show that India will allow imports of up to 100,000 internal -combustion engine (ICE) and hybrid passenger cars from EU countries in the first year at 30-35% duty with the quota, which will rise gradually to 160,000 vehicles by the 10th year. The tariff will come down to 10% from the fifth year. India currently charges duties ranging from 66% to 110% on passenger vehicle imports.
In return, the EU will allow imports of 250,000 Indian-origin cars in the first year at lower duties with a quota, rising to 400,000 vehicles by the 10th year.
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The EU’s preferential duty on Indian cars will fall from 8% in the first year to zero by the fifth year. At present the EU charged 10% duties on passenger vehicle imports. The bloc will provide preferential access for Indian ICE and hybrid cars priced up to 50,000 euros. For cars adobe
For cars priced between 15,000 and 35,000 euros, India’s in-quota tariff will decline from 35% in Year 1 to 25% in Year 2, 20% in Year 3, 15% in Year 4 and 10% from Year 5. For cars priced between 35,000 and 50,000 euros, the tariff starts at 30% and follows the same path to 10%. India has also sought to shield its mass-market automobile segment. The preferential passenger-car arrangement does not cover cars priced below 15,000 euros, limiting the immediate competitive threat to India’s largest-volume vehicle categories.
At the same time, the agreement creates a preferential route for European manufacturers in the premium and higher-priced segments, where European brands have traditionally had a stronger presence.
India has provided a separate preferential arrangement for completely knocked-down (CKD) vehicles, potentially encouraging European manufacturers to use local assembly rather than relying entirely on imports. On CKD kits duties will come down to 13.75% from 16.5% with a quota for the first year set at 75,000 by India. By Year 10, duties will come down to 8.25%, but the quota will also reduce to 50,000 units.
Deal on wines and agri products
While India has agreed to concessions on wines too, in exchange it has gained concessional duty access in several agricultural products. In the first year, wines from the EU in the 2.5–10 euro price band will see the basic customs duty reduced to 75% from 150%, while the duty on higher-value wines will be cut to 75% as well. The duty will then be progressively reduced, reaching 30% and 20%, respectively, by the eighth year. The cheapest wines, with a CIF value below 2.5 euro per 750 ml, will receive no tariff concession and will continue to face the 150% duty.
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The EU has opened several agricultural and food-product lines to Indian exports, while retaining protection for sensitive products. Concessions include duty-free quotas for cucumbers and gherkins (25,000 tonnes) and processed agricultural products with high sugar content (200 tonnes), along with preferential quotas for ghee (1,000 tonnes), sweetcorn (1,800 tonnes), dried onions (15,000 tonnes rising to 25,000 tonnes), starches (500 tonnes), molasses-based rum (4,000 hectolitres) and other processed foods.
TOPICSEuropean UnionThis article was first uploaded on September thirteen, twenty twenty-six, at six minutes past six in the evening. © IE Online Media Services (P) Ltd