India-EU Trade Deal To Slash Auto Duties, Boost Luxury EV Market

India and the European Union are close to finalizing a free trade agreement (FTA) that could reshape the automobile sector. The deal, described as the “mother of all trade agreements,” is expected to lower import tariffs on automobiles, particularly electric vehicles, making European luxury EVs more accessible to Indian consumers.  

Industry experts believe the tariff cut will not only spur demand for premium EVs but also encourage global automakers to consider manufacturing in India. While luxury imports may rise, budget EVs produced domestically are likely to remain unaffected, ensuring balance in the market.  

Key Highlights  

• Import duties on automobiles, including EVs, may drop to 10–15 percent under the FTA  
• European luxury EV makers such as Mercedes, BMW, and Audi expected to benefit  
• India aims to attract global automakers to set up local manufacturing units  
• Domestic budget EV segment remains largely unaffected due to local production  
• FTA also covers wines, spirits, and other European goods, while boosting Indian exports of textiles and leather  

Future Outlook  
The India-EU FTA is poised to strengthen bilateral trade ties and accelerate India’s EV adoption. By combining lower tariffs with manufacturing incentives, India could emerge as a key player in the global electric mobility ecosystem.  

Sources: The Economic Times, Business Today, Reuters