The long-running free trade agreement negotiations between India and the European Union have now reached a crucial stage. Meanwhile, the government is preparing to take a major step...

The dream of owning a luxury car will now become a reality! The India-EU deal could make BMW, Mercedes, and Volkswagen cheaper. Learn about the government's plan.

India EU Trade Deal: The long-running free trade agreement negotiations between India and the European Union have now reached a crucial stage. Meanwhile, the government is preparing to take a major step, proposing a significant reduction in the high tariffs imposed on cars imported from Europe. According to sources, this plan is considering reducing the current 110 percent duty to 40 percent.

According to a Reuters report, this discount will be given on selected vehicles imported from 27 countries of the European Union, whose import price is more than 15,000 euros (approximately Rs 16.26 lakh in Indian rupees).

This government decision could provide European car companies with a better opportunity to expand their presence in the Indian market, while also strengthening the possibility of finalizing a free trade agreement between the two sides.

Preparations underway for further reduction in import duty

As negotiations between India and the European Union progress, further relief on import duties is expected. According to media reports, plans are underway to gradually reduce the duty on cars to 10 percent in the future. If implemented, this proposal will make it much easier for major European companies like Volkswagen, Mercedes-Benz, and BMW to sell their vehicles in the Indian market.

The report also states that India has agreed to immediately reduce taxes on approximately 200,000 petrol and diesel vehicles each year. However, this number may change after the final agreement.

These companies will directly benefit.

If the trade deal between the Indian government and the European Union remains positive, and the Indian government decides to reduce taxes on imported cars, it will directly benefit major European automobile companies like Volkswagen, Mercedes-Benz, and BMW. These companies will have easier access to the Indian market.

India is the world's largest car market.

Despite being one of the world's largest auto markets, India imposes high taxes on foreign cars. India ranks third in market size, after the US and China.

However, fully built cars here face import duties ranging from 70% to 110%. This is why executives at several international auto companies have periodically questioned India's tax policy, citing it as a challenge to business.