The European Union is set to allow the import of up to 2.5 lakh Indian-made cars annually at an 8% duty under the proposed India-EU Free Trade Agreement (FTA), providing a significant opportunity for India’s automobile exporters.
The proposed tariff arrangement would substantially improve the competitiveness of Indian vehicles in the European market, where imported cars currently face higher duties.
Boost for Auto Exports
The lower tariff could encourage global and Indian automakers to increase vehicle production in India for export to EU markets. It is also expected to strengthen India’s position as a manufacturing and export hub for passenger vehicles.
The annual quota of 2.5 lakh vehicles would provide exporters with preferential market access while allowing the EU to manage the impact of lower tariffs on its automotive industry.
Trade Pact Opens New Opportunities
The automotive concession is part of broader negotiations aimed at expanding market access and strengthening trade and investment between India and the EU.
For India, improved access for automobiles could support higher exports, attract additional manufacturing investment and deepen integration with European supply chains once the trade agreement takes effect.