After nearly two years of negotiations, India and the European Union have finally concluded their long-awaited Free Trade Agreement (FTA). One of the most significant outcomes of the deal is the reduction of import duties on European cars. But while prices are expected to come down, there is a catch - the relief applies only to CBU (completely built unit) imports and not to CKD (completely knocked down) units, which many luxury carmakers rely on for local assembly.
Moreover, the duty cut will apply only to a concession quota of 2.5 lakh cars annually, ensuring that the benefit is controlled and phased. As of now, imported cars priced below USD 40,000 attract up to 70% import duty, while those valued above USD 40,000 are taxed at a steep 110%. The government has announced that duties under the FTA will be gradually brought down to 10%, but the exact rate of annual reductions is yet to be revealed. For electric vehicles, the timeline stretches further, as no duty cuts will be offered for the next five years.
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India-EU FTA: Cars That Could Get Cheaper
Here's a list of models that will benefit from the trade agreement between India and the European Union. The list includes models from major luxury car manufacturers like Mercedes-Benz, BMW, and others:
- Mercedes-AMG G 63
- Mercedes-AMG CLE 53
- BMW M4 Coupe
- BMW M8 Coupe
- BMW i4
- Audi RS Q8
- Porsche 911
- Porsche Cayenne
- Porsche Macan
- Porsche Taycan
- Porsche Panamera
- Maserati Grecale
- Lamborghini Urus SE
- Lamborghini Revuelto
- Lamborghini Temerario
- Land Rover Defender
- Rolls-Royce Ghost
- Bentley Bentayga
Addressing the update, Santosh Iyer, MD & CEO Mercedes-Benz India; “ Mercedes-Benz welcomes the India-EU FTA as it will have a positive cascading effect on customer sentiments for the luxury segment, with boost in overall economic growth. A gradual tariff reduction on vehicles and fully liberalized automotive parts are strategically important decisions in the FTA for the automotive industry. The FTA opens up new avenues for customers with improved vehicle allocations, better availability of top-end global models for Indian market, faster access to latest technology and creating a stronger luxury car ecosystem. Mercedes-Benz will however continue to value add to customers with local production of world-class models from our manufacturing plant. ”