The ongoing Free Trade Agreement (FTA) talks between India and the European Union are now in the final stage and it may have a big impact on the Indian auto market. According to reports, the government is preparing to reduce the import duty on cars coming from EU from 110% to 40%. If this happens, it will be the biggest change in the Indian auto sector so far. At present, the tax on foreign cars ranges from 70% to 110%, due to which brands like BMW, Mercedes and Volkswagen become very expensive. In the new proposal, petrol and diesel cars costing above 15,000 euros can get immediate duty cut and about 2 lakh cars will benefit annually. Going forward the duty is likely to be reduced by 10%. However, electric vehicles have been kept out of this relief for the first 5 years, so that Indian companies like Tata Motors and Mahindra can get protection. EU is India’s largest trading partner, and this deal can give a new direction to the auto market by 2030.

The Free Trade Agreement (FTA) between India and the European Union now seems to be reaching the final stage. To take this deal forward, India has given a big tariff offer. According to reports, it has been proposed to reduce the import duty on cars coming from Europe from 110% to 40%. This deduction will be applicable on premium cars whose import price is more than 15,000 euros. It is believed that this step can give a breakthrough to the India-EU FTA negotiations that have been stuck for years. At present the goods and services trade between India and EU is more than $190 billion. European Union is also India’s largest goods trading partner, so this FTA can prove to be a game changer for both the economies.