The Indian government will reduce import duties for European cars, facilitating access to the local market for brands such as Volkswagen, Mercedes-Benz, and BMW.

The government of Prime Minister Narendra Modi has decided to immediately reduce the import tax for cars from the European bloc priced over 15,000 euros, thus facilitating access to the Indian market for manufacturers such as Volkswagen, Mercedes-Benz, and BMW. This reduction will gradually reach 10%. India and the European Union are expected to announce the completion of negotiations for a free trade pact, which could expand bilateral trade and increase Indian exports of goods affected by tariffs imposed by the U.S. Although India is the third-largest auto market in the world, the domestic auto industry has been protected by high tariffs of 70% and 110% on imported cars. The government has proposed an immediate reduction to 40% for approximately 200,000 internal combustion engine cars per year, but electric vehicles will be excluded from these reductions in the first five years.