BMW Warns Delays In India-EU FTA Could Stall Luxury Car Purchases

On May 7, 2026, BMW Group India President and CEO Hardeep Singh Brar highlighted the urgency of finalizing the India-EU FTA. Speaking at a Federation of European Business in India (FEBI) event, he noted that uncertainty around tariff reductions is already influencing customer behavior.

BMW’s Concerns

Brar explained that many buyers are delaying purchases, anticipating significant price drops once the FTA takes effect. He emphasized that clear visibility on timelines is essential for both customers and automakers to plan effectively. Without this, the luxury car market risks stagnation.

Tariff Reductions

Currently, import duties on cars are 110% for vehicles priced above USD 40,000 and 70% for those below USD 40,000. Under the FTA, duties are expected to drop sharply, with higher-priced cars seeing a reduction to 40% in the first year of implementation. This would make European luxury cars far more affordable in India. 

Quota Mechanism

Brar also raised concerns about the quota regime, unique to the automotive sector. The agreement proposes an initial quota of 100,000 units, divided across price slabs from €15,000 to €35,000 and above. He stressed that transparency in quota allocation is vital to ensure fair market access. 

Policy Context

The EU Ambassador to India, Herve Delphin, confirmed that the FTA is likely to enter into force in 2027 after ratification. While industry players welcome the agreement, BMW’s call underscores the need for faster timelines to avoid uncertainty and maintain sales momentum. 

Key Highlights

•⁠  ⁠BMW India urges faster India-EU FTA implementation

•⁠  ⁠Customers may postpone purchases until tariff cuts are finalized

•⁠  ⁠Import duties to drop from 110% to 40% under FTA

•⁠  ⁠Quota regime of 100,000 units raises concerns about transparency

•⁠  ⁠EU Ambassador confirms FTA likely to take effect in 2027

Sources: Moneycontrol, Rediff Money, Goodreturns, The Hindu BusinessLine, The Week