Indian Carmakers Push to Postpone EV Import Tariff Reductions Until 2029 During Trade Deal Talks with U.S.

Unknown Apr 02, 2026 600 Views

Indian automakers are said to be pushing the government to postpone import tariff reductions on electric vehicles (EVs) until 2029, arguing that they need to safeguard local manufacturers and allow for a gradual transition. As per sources, these tariff cuts are likely to be included in the first phase of a trade agreement with the United States, raising concerns among automakers that it may become a precedent for future trade talks with the European Union (EU) and the United Kingdom (UK).

Key Highlights:

Existing Tariffs: India levies import tariffs of approximately 100% on completely built EVs, which are costly for buyers. Automakers suggest a tariff reduction in phases after 2029 to enable local manufacturers to build up their EV manufacturing strength.
Trade Agreement Consequences: The tariff reductions are being negotiated within a larger trade agreement with the U.S., which is to increase bilateral trade and investment. Indian automakers, however, worry that whatever concessions are granted in this agreement will put pressure on future trade negotiations with other regions such as the EU and UK.
Domestic Industry Issues: Indian automakers contend that they are concerned that immediate tariff cuts would inundate the market with foreign EVs, preying on domestic players who are investing a lot in constructing EV charging infrastructure and manufacturing.

Government's Stand:

Reports suggest that the government is balancing these issues while negotiating the trade agreement. A gradual process for reducing tariffs is being proposed to harmonize international obligations and domestic industry support.

Leadership Observations:

An industry executive stated, “Delaying tariff cuts until 2029 will give Indian manufacturers the time needed to compete globally while supporting India’s EV goals.”

Outlook:

The outcome of these negotiations will shape India’s EV market dynamics and its position in global trade.

Sources: Reuters, Economic Times; April 2, 2025

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