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Informist, Wednesday, Jan. 28, 2026

 

--Govt source: To cut duty on 100,000 cars in 1st year of EU FTA 
--Govt source: No duty cut on EVs of CIF below 20,000 euros under EU FTA 
--Govt source: No duty cut on cars of CIF below 15,000 euros under EU FTA

 

NEW DELHI – The quota and conditions attached to tariff liberalisation on cars under India's free trade agreement with the European Union should help safeguarding the domestic industry, a commerce ministry official said. New Delhi has committed to cut duty on cars from the EU to 10% from 110% in a phased manner staggered over several years with a quota limit of 250,000 cars per year. 

The government will cut duty only on internal combustion engine cars with a cost insurance freight value of over 15,000 euros (around $18,000 or INR 1.7 million), the official said. The on-road price, which would include several other tax components like goods and services tax and road tax, of these cars could be over INR 2.5 million, according to the official.

 

Meanwhile, on electric vehicles, tariff concession will be only on those with CIF value over 20,000 euros. The tariff reduction on EVs will also begin from the fifth year of the implementation of the trade deal, the official said.

The quota limit of 250,000 includes 160,000 cars with an internal combustion engine and 90,000 EVs. But in the first year of the trade deal, the quota limit will be 100,000, which will gradually rise to 250,000.

 

In the first year, the quota limit will be 34,000 for cars with a CIF of 15,000-35,000 euros, 33,000 quota for cars with CIF of 35,000-50,000 euros, and 33,000 for those with CIF above 50,000 euros.  

 

The EU will also offer India tariff liberalisation on 625,000 completely built units per year, the official said.

 

India and the EU concluded negotiations for a free trade agreement this week, which offers tariff concessions on over 95% of export value for both sides. With this deal, both sides aim to double their bilateral trade by 2032. Both sides had bilateral trade of $64 billion in 2024-25 (Apr-Mar).  End

 

Reported by Krity Ambey

Edited by Akul Nishant Akhoury

 

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