India Open to Reducing Auto Import Tariffs to 10% Under EU Trade Deal

According to news reports, India is considering a phased reduction of auto import tariffs from over 100% to 10% as part of its ongoing trade negotiations with the European Union, according to government and industry-related reports.

Ongoing Trade Talks

The trade talks between India and the EU have been ongoing for several years. In February 2025, both parties agreed to aim for a conclusion by the end of the year. Recent discussions indicate that India may revise its offer to help close the deal.

Industry Resistance

Despite the new proposal, there is strong opposition from Indian automakers. Companies such as Tata Motors and Mahindra & Mahindra have pushed for a minimum 30% tariff, citing the need to protect domestic manufacturing. Industry bodies have also requested that no changes be made to electric vehicle (EV) import duties until at least 2029.

A proposal from the industry suggested cutting tariffs on a limited number of petrol vehicles to 70% immediately, with a gradual reduction to 30%. For EVs, the industry wants a phased tariff reduction starting after four years, with import duties capped at 30%.

EU’s Demands

The European Union has asked India to remove import tariffs on cars completely. This would allow companies like BMW, Volkswagen, and Mercedes-Benz wider access to the Indian market. Tesla, which plans to sell EVs imported from its Berlin factory in India this year, would also benefit.

Government Discussions

India’s commerce ministry communicated the EU’s position and India’s evolving stance to the heavy industries ministry and automobile industry representatives in a closed-door meeting last week.

Conclusion

While no final decision has been announced, India’s willingness to reduce tariffs signals movement in trade talks with the EU. The outcome may reshape access to the Indian car market for foreign manufacturers.

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